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518th Council Meeting 3 April 2009 1 Economic Development And Tourism Committee Meeting 31 March 2009 Agenda

518

Adopted Report for the

Economic Development and Tourism Committee Meeting

held

Tuesday, 31 March 2009 at

2:00 pm

Gold Coast City Council Chambers 135 Bundall Road Surfers Paradise

Our positioning statement Working for our future - today Our vision Naturally, the world’s best place to be . . . because we will create a city that is recognised internationally for the quality, diversity and sustainability of its lifestyle, economy and environment. The Gold Coast’s future will be secure as Australia’s most desirable place to live and favourite place to visit.

Our mission To benefit our local community by sustainably managing the City’s resources and opportunities, and by delivering high-quality, affordable services, in partnership with the community, State and Federal Governments, educational institutions and the private sector.

518th Council Meeting 3 April 2009 2 Economic Development And Tourism Committee Meeting 31 March 2009 Adopted Report

Index

Adopted Report Economic Development and Tourism Committee Meeting

Tuesday, 31 March 2009

Item Direct. File Page Subject

1 EDMP CM787/789/04/01(P1) 4 ECONOMIC STIMULUS MEAURES - FUNDING REPORT

Closed Session

2 EDMP PD330/292/08(P2) 59 GOLD COAST INVESTMENT FUND UPDATE REPORT

Open Session

3 CG FN334/375/11(P1) 60 2008-09 LOAN BORROWING APPLICATION

4 EDMP PN240206/46/02(P3) 70 SURFERS PARADISE TRANSIT CENTRE SITE REDEVELOPMENT ENQUIRY BY DESIGN WORKSHOP OUTCOMES

5 EDMP LG235/46/03/03(P3) 84 EVANDALE CULTURAL AND WORKPLACE PROCESS REPORT NO 2

6 EDMP WF54/16/-(P43) 105 HOPE ISLAND REPORT 103 – MARINA QUAYS PRECINCT 2 PLAN SEALING

Closed Session

7 EDMP WF54/16/-(P43) 109 HOPE ISLAND REPORT NO 104 - OUTSTANDING LAND DEDICATIONS

General Business

KEY: CEO - Chief Executive Officer CG - City Governance CMS - Community Services EDMP - Economic Development & Major Projects ES - Engineering Services GCW - Gold Coast Water OS - Organisational Services PET - Planning Environment & Transport

518th Council Meeting 3 April 2009 3 Economic Development And Tourism Committee Meeting 31 March 2009 Adopted Report ATTENDANCE Cr S Douglas (Chairperson) Cr R W Clarke Cr M Grummitt Cr P Young Cr J Grew Cr G Betts Cr D Crichlow Visitor Cr E Sarroff Visitor Cr C Robbins Visitor Cr J Wayne Visitor Cr D Gates Visitor Mr D Dickson CEO Mr D Scott Director Economic Development and Major Projects Mr J McCabe Director City Governance Mr W Rowe Director Planning Environment & Transport Mr G Perry Manager Economic Development Mr D Stewart Acting Manager Major Projects Mr D Langen Coordinator Major Projects Ms D Dixon Coordinator Economic Development Mr G Herridge Project Officer Mr J Harris Project Officer Mr J Blair Manager Corporate Finance Mr J Reeves Coordinator Financial Development Mr B Webb Financial Planning & Treasury Coordinator Ms K O’Brien Manager Commercial Performance Mr P Cramp PET Infrastructure Planning APOLOGIES Cr R La Castra ADOPTED AT COUNCIL 3 APRIL 2009 RESOLUTION G09.0223.010 moved Cr Douglas seconded Cr Young That the Report of the Economic Development & Tourism Committee Meeting held on Tuesday, 31 March 2009 covered by Recommendations numbered ED09.0331.001 to ED09.0331.007 be received.

CARRIED RESOLUTION G09.0223. 012 moved Cr Douglas seconded Cr Young That the Report of the Economic Development & Tourism Committee’s Recommendations of Tuesday 31 March 2009, numbered ED09.0331.001 to ED09.0331.007, be adopted with the exception of:- Recommendation Numbers ED09.0331.001 and ED09.0331.007 which were specifically resolved.

CARRIED


ITEM 1 ECONOMIC DEVELOPMENT BRANCH ECONOMIC STIMULUS MEASURES – FUNDING REPORT CM787/789/04/01(P1) Refer 27 page attachment 1 BASIS FOR CONFIDENTIALITY Not applicable. 2 EXECUTIVE SUMMARY This report provides an overview of a variety of options available for Council implementation to provide prompt economic stimulus to the city. The unprecedented economic circumstances the Gold Coast is facing has affected business, industry and employment around the world. The report addresses potential economic stimulus items including direct Council expenditure, Council procurement processes, developer subsidies and the streamlining of developer approval processes. In order to stimulate confidence back into economies around the world governments are offering stimulus packages targeted at job creation, retention and economic growth. As other levels of government have done, Council has considered ways to provide a stimulus to the city’s economy including the use of a direct Council expenditure to implement a range of ‘shovel ready’ projects. These projects are anticipated to have economic benefits to the city should they be implemented in the short term at a cost of up to $126.02million. There are a number of potential funding options to implement projects and activities contained within the economic stimulus package. It is recommended that loan funding be used to fund the identified projects and activities. Further, it is recommended a combination of revenue in the form of a general rate and developer contributions be implemented to service the debt raised by the loan funding. Another option for stimulating the economy through construction based projects is through deferring or subsidising various components of the City’s infrastructure charges. If Council chooses to provide a stimulus using infrastructure charges, a subsidy is recommended as it would be able to be efficiently managed and could apply to developments immediately. Funding could be sourced either directly from the annual budget through cuts to other areas of the budget, through a general rate increase, or loan funded. The Council could choose a suitable maximum amount to fund the subsidy. It is recommended that the package should commence as soon as practical, at $4million in total for a 2 year period or until the identified funds are exhausted. If Council chooses a subsidy or deferral option then Council would be required to form a policy on how it would be administered. The report also outlines significant work being undertaken to streamline developer approval process to ensure development activity is assisted as far as possible. There are a variety of activities already implemented to achieve this, in particular working in collaboration with the Urban Development Institute of Australia (UDIA) on a 50-point plan to improve the service to industry. Council procurement is another area of activity that is being used to assist the local economy, whereby local providers are preferred (all other things being equal) and payment terms are kept as short as possible.


ITEM 1 (CONTINUED) ECONOMIC STIMULUS MEASURES – FUNDING REPORT CM787/789/04/01(P1) 3 PURPOSE OF REPORT The report provides an overview of the activities Council can implement to achieve immediate economic stimulus including direct Council expenditure on projects, the streamlining of the developer approval process, developer subsidies and improved procurement processes 4 PREVIOUS RESOLUTIONS Refer to Attachment 1 5 DISCUSSION 5.1 Economic Stimulus Background The global economic crisis on the Gold Coast has affected business, industry and employment. Council has in place an Economic Development Strategy that seeks to create in the medium to long term, a diversified and robust city economy. Research undertaken as part of the Bold Future project has identified that this strategy has been efficient and should be continued. However, in response to the current crisis Council is considering ways to provide a stimulus to the city’s economy including identifying a range of ‘shovel ready’ internal projects to be funded by direct Council expenditure. Additionally the use of developer subsidies, developer approval and procurement processes have been assessed as to their ability to have a direct impact on delivering economic benefits to the City should they be implemented in the short term. This report addresses the following economic stimulus items: a Direct Council expenditure; b Developer assistance; c Streamlining the developer approval process; and d Procurement processes. 5.2 Direct Council Expenditure Council identified eight recommended economic stimulus projects and activities to be further developed and submitted for consideration in an economic stimulus package (refer to Attachment 2). These being;

• Surfers Paradise Foreshore Redevelopment • Gold Coast Industry Investment Attraction Project • Stormwater Infrastructure Construction • Major Roads Projects • Robina Space Project • Selected Bikeway Projects


ITEM 1 (CONTINUED) ECONOMIC STIMULUS MEASURES – FUNDING REPORT CM787/789/04/01(P1) • Export Support for Local Firms • Southport Broadwater Parklands These projects have been included in the proposed loan program (refer to separate report in this agenda) and in current planning and budget work. It is noted that two additional projects that Council is progressing could also be considered to provide significant economic stimulus: • Carrara Stadium redevelopment • Evandale Cultural Precinct/GCCC Accommodation Project However for the purposes of this report only the Carrara Stadium is included in the funding discussion provided in section 10. 5.3 Developer Assistance - Infrastructure Charges Deferral & Subsidy Options There are various options of subsiding or deferring various components of the City’s infrastructure charges1 to stimulate the Gold Coast Economy. Options to be analysed in relation to the economic benefits and financial impacts include: a Subsiding various components of infrastructure charges by between 10 – 25% with

pre-established conditions; b Limiting the total of all infrastructure charges to less than 5% of the total project cost in

any one development proposal; c Payment arrangements to defer infrastructure charges; d Reviewing the infrastructure charges methodology generally; and e Establishing a calculation formula which allows apportionment of charges applied to

small scale development. The scope for subsidising infrastructure charges is available for Council to consider. This involves reducing the amount of infrastructure charges a developer pays, however, the amount of infrastructure charges subsidised should be provided to the infrastructure network owner through some other funding source. To subsidise will shift the cost of infrastructure from the developers to the general rate payer. Any subsidy provided will create a shortfall in network infrastructure funds. Council has a responsibility under the Priority Infrastructure Plan (PIP) and Infrastructure Policies to collect and expend funds collected on the required infrastructure program to maintain the level of service outlined in the PIP and policies. To do so it should fund the infrastructure networks to the amount of the subsidised amount of infrastructure charges. Chapter 5 of the Integrated Planning Act 1997(IPA) does not specifically detail how subsidies are to be funded. Section 5.1.7 states that the infrastructure charge must be for a trunk infrastructure network that services, or is planned to service, premises and is identified in the PIP.

1 In this report, the term "infrastructure charges" covers both charges under Council's PIP and Infrastructure Policies (Water and Sewerage) which are currently in place .


ITEM 1 (CONTINUED) ECONOMIC STIMULUS MEASURES – FUNDING REPORT CM787/789/04/01(P1) The section infers that the funds are to be used for no other purpose than those identified in the PIP and that to fund initiatives such as economic stimulus would be contrary to the PIP intention which is to collect charges from developers to fund specifically planned infrastructure projects. If Council resolves to further investigate one of the subsidisation options, legal advice will need to be obtained in relation to whether the provision of a financial benefit to various enterprises will trigger the enterprise powers provisions in the Local Government Act 1993. 5.3.1 Areas where infrastructure charges are currently under collected It is important to note that Council already “under recovers” infrastructure charges. This means that in effect developers are not currently meeting the real costs of the infrastructure their development’s impact. Therefore, arguably, developers are already receiving subsidised or discounted infrastructure charges. The following details where the shortfalls occur: All Networks a The logic to determine the net developable area is conservative (site area less

constraints, such as flooding, roads and open space) and usually based on that detailed in the plans of development (developer plans). In all cases the lowest NDA is used to calculate the charge, limiting the calculated yield of the site. For example Council may service 5 lots but only recovers funds to service 4 lots.

b As Council allows staged development, the recovery of charges is delayed for large lots that are part subdivided to create new lots and management lot/s. The infrastructure is planned on the assumption that the whole lot would develop at the same time hence the infrastructure is provided, but the charge only partially recovered. The remainder is recovered when the entire lot is developed.

c Administration costs are recoverable under the PIP. Currently Council imposes a 1.5% administration charge . Recent findings detailed in the draft Queensland Competition Authority Report for the water and wastewater networks prepared for the Department of Infrastructure and Planning suggested that the costs could be as high as 5%.

d Developments that occurred throughout the city prior to the introduction of infrastructure charges policies may not have charged for their network impacts. Council grants a credit for existing lawful uses regardless of whether a charge has been paid or not. Council also grants a credit for existing vacant residential lots.

Recreation Network e The commercial charge within the recreation component of the PIP is understated. The

intent of the non-residential charge was to phase in the charge over a period of PIP amendments rather than in the first instance.

f Lenient credits – Council sometimes awards offset credits for land which does not conform with Council’s desired standard of service e.g. recreation parks are encumbered with a stormwater detention basin.

g Land exclusion – fair apportionment requires that future residents contribute to existing parks, and existing residents contribute toward future parks. Council does not charge new development for their contribution toward parks paid for pre 1990, despite their high impacts on these parks e.g. foreshore reserves.


ITEM 1 (CONTINUED) ECONOMIC STIMULUS MEASURES – FUNDING REPORT CM787/789/04/01(P1) h Establishment costs – Developers are charged only for the minimum establishment

period (18-24 months) of the ecological embellishment of parks e.g. trees. Water and Wastewater Networks The Infrastructure Policies which are currently in place have lower charges than the proposed PIP which is now 18 months behind the original implementation plan due to delays with the second State interest check. Gold Coast Water (GCW) has been building the infrastructure identified in the PIP but have only been able to charge the Policy rates due to the delays in the State Government approval process for the PIP Amendment. The difference between draft PIP and Infrastructure Policy rates are:

• 0-23% less than the PIP rates in non dual reticulation areas and • 22-28% less than the PIP rates in the dual reticulation areas When the QCA report findings2 are included from the PIP approval process, the shortfall from Policy to PIP is as follows:

• 16-44% less than the PIP rates in non dual reticulation areas and • 49-60% less than the PIP rates in the dual reticulation areas Until the PIP is finally endorsed by the State Government, Council will continue to under recover costs for the water and wastewater networks and will not recover any of the costs for the recycle network in the northern area of the City. Self assessable developments which can be charged under the PIP are not chargeable under the Infrastructure Policies. Although these developments impact on the infrastructure network, they do not pay for their impacts. (e.g. warehouses which do not require a development application). When the infrastructure was costed in the Infrastructure Policies the unit rates for wastewater pipes, in particular, were approx 40% of the estimated construction cost in 2004. 5.3.2 Priority Infrastructure Plan The PIP and Infrastructure Policies have been developed in accordance with statutory requirements and in consultation with the State Government and other stakeholders to ensure that developers pay a fair portion of the cost of infrastructure provision, which will support the demands new developments place on the relevant infrastructure networks. Council currently charges for the following networks to fund related services: • Recreation • Storm water • Transport (both Council and State controlled roads) • Wastewater and • Water

2 As identified in the Draft Queensland Competition Authority (QCA) report the infrastructure charge rates in the PIP are understated by approximately 22%, which was due to consumer price index (CPI) outstripping the construction index since the development of the infrastructure charges and the methodology used to calculate the charges.


ITEM 1 (CONTINUED) ECONOMIC STIMULUS MEASURES – FUNDING REPORT CM787/789/04/01(P1) Council provides purely an administrative function for the infrastructure charges collected on behalf of other entities. These entities are: • Main Roads Department and • Bulk Water Authorities Charges associated with these entities have been excluded from the analysis within this report. From July 2010 Council may also administer the collection of the charges for the non bulk water and wastewater networks on behalf of the new water/wastewater entity. Council is currently reviewing its PIP and infrastructure charges policies following Local Government reform. These matters will come forward to Council for consideration as part of the PIP Review process which is anticipated toward the end of 2009. This process will address the review of the infrastructure charges methodology and establish a calculation formula which allows apportionment of charges applied to small scale development. The Integrated Planning Act 1997 (IPA) and associated infrastructure plan development guidelines are currently changing or under review. Further details will be presented to Council as the PIP review progresses in relation to revised IPA outcomes, the charging methodology, State Government Guidelines and any proposed changes to the PIP. 5.3.3 Options for Economic Stimulus Without appropriate economic modeling of subsidised infrastructure charges, resulting economic stimulus to the community of Gold Coast is undetermined. Land development projects have been postponed by developers in the short term. A recent article in the Gold Coast Bulletin on 26 February 2009 suggested that the Housing Industry Association (HIA) attributes the housing slump not so much to an oversupply of housing but more due to the credit “squeeze” and lack of business confidence. The article stated that the Gold Coast has been hardest hit in the high end property market such as waterfront and beachfront suggesting the lower end of the housing market continues to perform. The article also states that although the HIA recognises that the Federal Government's fiscal stimulus package will create an estimated 20,000 extra public houses, the HIA is uncertain whether the package will assist Gold Coast. Reductions in infrastructure charges could make housing more affordable provided the savings are passed onto buyers. Considering the uncertainty of Australia's economy as a whole, it is not clear whether a reduction in infrastructure charges would provide the Gold Coast with any immediate stimulus without more detailed economic modeling. Until business confidence improves, across all sectors, building and subdivision applications may be subdued for some time. The recent release of GDP figures state that the Australian economy contracted 0.5% in the last quarter, implying that Australia’s economic outlook remains subdued. The economic downturn will continue to impact the Gold Coast in the short term assuming that business confidence remains subdued.


ITEM 1 (CONTINUED) ECONOMIC STIMULUS MEASURES – FUNDING REPORT CM787/789/04/01(P1) Should Council decide to pursue any of the options in this report, a market based economist would need to be engaged and a further report be brought back to Council to advise of the nature and extent of the economic stimulus the initiative may bring to the Gold Coast economy. If Council chose to subsidise infrastructure charges, the burden of that subsidy will be borne by the ratepayers of the city in an increase in the general rate, extra interest and redemption on loans, or budget cuts to other areas of the budget. The options for economic stimulus in relation to developer subsidy for consideration include the following: a Subsidising various components of infrastructure charges during the

2009/2010 financial year by between 10 – 25% Attachment 3 shows the infrastructure charges received and forecast for the current financial year, together with a forecast for 2009/2010. It is important to note that the year to date receipts are approximately 72% of the those received in the prior year for the comparative period. Options for managing conditions for subsidy are detailed in the table below:

Options for Managing Conditions of Subsidy

Stimulus

Conditions of Approval: Most of the desired conditions noted within Council’s resolution could only be imposed on new approvals if they were to be included in the decision notice.

These conditions of approvals would be placed on approvals decided in the 2009/2010 year. Most approvals take between 1 and 6 years to proceed, so the stimulus effect is likely to be delayed substantially.

Conditions of Subsidy Approval: Could be offered as a condition of the subsidy approval, with the onus of proof on the developer. Council could grant subsidies to approved subsidy applicants for current approvals.

Using a condition of subsidy method would provide a more immediate benefit and opportunity for immediate stimulus. Any approvals (including current) that met nominated criteria would be eligible for the subsidy.

One issue is that offering a “subsidy” for commencements in 2009/10 may mean that subsidies are given without projects being taken up i.e. developers may choose to prepay3. This could mean a new compliance process is required within Council to ensure projects are actually commenced shortly after charges are paid or that the payment milestone has actually been achieved. The following possible conditions were outlined in Council’s resolution for consideration:

a construction on site commencing within the year;

b the estimated time for completion is met (unless otherwise agreed through exceptional circumstances); and

c quality of construction meetings Council’s standards.

3 The business practice of “prepaying” was common during the phased water/wastewater contribution from 2005


ITEM 1 (CONTINUED) ECONOMIC STIMULUS MEASURES – FUNDING REPORT CM787/789/04/01(P1) The onus would be on the applicant to prove that they meet all determined conditions. Council would have to have a suitable policy position and business process developed to administer this. Conditions a & b would be managed by awarding the subsidy only when the development has clearly proceeded to the suitable payment milestone. Condition c is already enforced through conditions and compliance measures. Should Council proceed to subsidise infrastructure charges by 10% to 25% over 2 years the total costs is estimated to be in the order of between $15 million and $37 million, assuming no worsening of the economic climate. If Council proceeded to apply subsidies to developments at plan sealing stage resulting from finalisation of reconfiguring of a lot or finalising buildings and commencing new land uses, the subsidy would largely apply to those developments already commenced and is unlikely to provide any real economic stimulus. On the other hand developments approved and shelved may be brought on for construction providing some stimulus. If Council proceeded to apply the subsidy to development applications currently being assessed or new applications it is likely that at the earliest developments would be finalised within 6 months and may take 2 years or longer for larger approvals delaying stimulus. b Limiting the total of all infrastructure charges to less than 5% of the total

project cost A sample of typical applications and their estimated project costs and related infrastructure charges and conditions are shown in Attachment 4. The project costs in the table are based on the estimated costs of the construction provided to Council on the building application or operational works application. These figures are supplied at lodgment for statistical and insurance purposes and are often not an accurate reflection of the true project costs. Calculating infrastructure charges would be difficult to administer due to: a Different project accounting methods; b Estimation of project costs initially with project costs changing during construction; c Audit issues associated with allocating ratepayers funds to subsidise developer’s

charges; and d Extra administration effort and resource required. It would be difficult for Council to determine with certainty what a true project cost is for the purposes of determining a maximum infrastructure charge. The experience the infrastructure providers have in determining the fair value of infrastructure built for comparatively small engineering works indicates that agreement on a project cost and value is difficult and estimates are often inaccurate. Under both the PIP and Infrastructure Policies, the infrastructure charge has been determined based on the impact of the development and/or planning for the site, not the cost of the development. If the cost of the development is used as the key criteria for establishment of the charge, the risk to Council is that the developer may be impacting the infrastructure greatly but not paying their share of the infrastructure costs.


ITEM 1 (CONTINUED) ECONOMIC STIMULUS MEASURES – FUNDING REPORT CM787/789/04/01(P1) If Council proceeded to subsidise based on 5% of the project costs, it is difficult to accurately determine the project costs as the project costs provided are different to Council costs in many instances. This may be because Council pays contract rates in a lot of instances or Council can sometimes provide capital items cheaper than the developer or vice versa. This option also does not consider the relationship between the development’s impact on the infrastructure network and the infrastructure charge and contradicts Council’s PIP and Infrastructure Policies. c Subsidy Capping The total economic stimulus detailed in this report is in the order of $100 million through other incentives without consideration of subsidising infrastructure charges. As the overall impact of the economic stimulus that may result due to the reduction of infrastructure charges is unknown it is proposed to allocate $4.0 million over a two year period(2009/10 & 2010/11), $2.0 million each year on a first come first serve basis. If a subsidy proceeds, a policy will need to be developed outlining eligibility criteria for the subsidy. d Subsidy Options For all subsidisation options, the impacts are as follows. Regardless of the level or type of subsidisation options Council may elect to support, subsidisation may benefit marginal forecast profitability projects. Impacts are predicted to be short term and economic stimulus may occur, but that is undetermined and cannot be established without undertaking an in depth economic modeling exercise. A 25% subsidy of infrastructure charges expected to be incurred in the coming 09/10 financial year equates to a total projected cost of $17 million. This subsidy will be spread across a number of developments. It is reasonable to assume that developments with marginal profits will not go ahead in the current economic climate because of a reduction in infrastructure charges alone. It is also reasonable to assume that some developments will proceed if a subsidy is provided. Any subsidization option endorsed from this report favours comparatively small numbers of the development sector. Others will not receive the subsidy due to finishing their developments outside of the time frame for which subsidization is proposed. e Economic Stimulus as a result of Subsidy Many projects which are likely to be unprofitable in the current economic climate will not go ahead on the basis of a reduction in infrastructure charges and contributions alone. Generally, infrastructure charges constitute only 4% of the costs of new housing. An 18% return to the developer is listed on average. (LGAQ4, 2008). It should be noted that Council already provides rebates to various "not-for-profit organisations" as listed in PIP Section 13.3.3.

4 Local Government Association of Queensland (2008) Breakdown of Housing Costs in South-East Queensland Final Report October 2008


ITEM 1 (CONTINUED) ECONOMIC STIMULUS MEASURES – FUNDING REPORT CM787/789/04/01(P1) f Deferral of infrastructure charges An infrastructure agreement can be entered into to defer payment of infrastructure charges (options are provided in Attachment 5). The cost to Council of developing, reporting on and administering the agreement and setting up processes to manage debts is high because of: • changes of lot description (generally by reconfiguration of lot) • the sale of lot • search management processes regarding the lot.

The risk of the developer defaulting on the agreement is high, especially in the current economic conditions. To ensure Council does not forego infrastructure charges, a bank guarantee from the developer would be required to secure the debt. It is important to note that if the project is having problems getting finance, security to support the bank guarantee could be difficult to obtain, and reduce their ability to meet their other secured obligations. If Council chooses to subsidise in some form, there is a risk that a large portion of the available funds will be taken up by developments which were proceeding anyway, thereby providing no economic stimulus. Further work needs to be undertaken to determine the true economic stimulus of any initiative. Each subsidisation option may provide a benefit to both small and large developers, where the amount of the subsidy is likely to be significant. Council could choose to limit it’s risk by determining a maximum subsidy it is prepared to fund. Large developments may take a large amount of the available funds. Council may choose to use a “sliding scale” of subsidy percentages to target different development scales. To ensure that Council does not forego Infrastructure Charges, security by way of a bank guarantee would be required. There may be some developers who could take advantage of some cash flow initiatives. This option is open to Council and the industry on a case by case basis. It is likely to require extra resources and impose a high administrative cost to Council if large numbers are negotiated. There would be significant legal costs for Council associated with drafting and then enforcing the infrastructure agreements. g Analysis of Deferral of Infrastructure Charges Options Deferral of a component of infrastructure charges may mean that some projects may proceed because of improved cash flow forecasts. This is unlikely to provide immediate economic stimulus to the Gold Coast economy as agreements will only benefit some developers who have temporary cash flow (ie not profitability) issues. There would be significant legal costs for Council associated with drafting and then enforcing the infrastructure agreements.


ITEM 1 (CONTINUED) ECONOMIC STIMULUS MEASURES – FUNDING REPORT CM787/789/04/01(P1) 5.4 Streamlining Developer Approval Process Council’s Development Approval process has been reviewed to seek to streamline processes where possible for projects deemed to have significant economic value. Process improvements that have been implemented by Council’s Development Assessment Review Team include the following: a PreAssessment process which assists applicants in lodging quality applications. This

process includes a check of IPA Properly Made and Council’s Well Made requirements. Since its introduction in November 2007 Council has seen an improvement in the applications being lodged taking our Not Properly Made application rate from 36% down to 7%.

b RiskSmart. This initiative looks at assessing low risk applications through a checklist process which reduces assessment timeframes and refocusses staff to higher risk issues. A five business day turnaround is offered to applicants who meet with RiskSmart requirements.

c A complexity matrix has been introduced which allocates application types against expected turnaround times. For example Category One applications which include Display Homes, Estate Sales Offices, Fast Food Premises, Reconfiguring a Lot - 2 lot subdivision etc with less than two internal referrals should have a decision made in less than three months. Often these decisions are being made within 20-30 business days.

d Service Level agreements are being finalised to provide transparency in the expectations of the role of internal referrals in the development assessment process to ensure that projects of economic significance can be prioritised.

e Process improvement opportunities are constantly being investigated. PET are working with Brisbane City Council in reviewing processes and looking at ways of introducing consistent processes to support industry. Part of this work will include opportunities to manage timeframes by reducing the need for comprehensive information requests.

f Council has taken action to reduce information and decision making extensions. Where possible relevant and reasonable conditioning will be applied to development applications in order to meet timeframes.

Improved methods of communication have been implemented to assist with streamlining the DA process:

a The Chief Executive Officer has regular meetings with the president of the UDIA and SDGC to discuss high level development assessment concepts .

b Regular industry briefings are being held where new initiatives and updates are provided to industry representatives. Attendees are invited to raise their concerns/issues with attending Council officers.

c Council is working with the Urban Development Institute of Australia (UDIA) on a 50 point plan to improve services between Council and the industry. Approximately two-thirds of the points raised have now been resolved or actioned to the industry’s satisfaction.

d Regular meetings are held between UDIA and Council officers where future initiatives and process improvements are discussed. Industry concerns are raised and discussed to ensure prompt resolution.


ITEM 1 (CONTINUED) ECONOMIC STIMULUS MEASURES – FUNDING REPORT CM787/789/04/01(P1) e Meetings with Sustainable Development Gold Coast (SDGC) have been undertaken to

resolve issues raised.

f Initial discussions have taken place with Master Builders Association Queensland (MBA). Interaction with Council and the MBA will continue to ensure both parties understand their respective challenges and work together into the future.

g The Manager of I&A Branch is regularly meeting with industry representatives to provide open discussion opportunities.

5.5 Council Procurement Processes – Local Purchasing Council’s procurement policy contains purchasing guidelines on how different aspects of its procurement processes are applied. Within the guidelines is a document known as Council’s “Local Purchasing Opportunities Policy”. This policy came about due to the requirements of the Local Government Act with one of the five principles being the development of Local Business and Industry. In the past this policy has been applied to tenders where local tenderers are competing for business. For example, this policy is regularly applied to the purchase of motor vehicles where local suppliers tender to supply vehicles. The policy requires officers assessing tenders or quotations to develop evaluation criteria which include either a “weighting” factor or “margin” rate for Local Purchasing Opportunities. The dynamics of the policy are that where all things are equal, the local business will receive consideration against the following criteria: a Creation of local employment opportunities through ongoing support for local

manufacturing, construction and service industries;

b More readily available spare parts and servicing support;

c More reliable compliance with warranty provisions;

d Shorter supply lines;

e More convenient communications for contract administration;

f Greater scope for cooperative product development and influence to the supply base; and

g Benefit to the Council of associated local commercial transactions. The policy requires recognition of the strength of the local supplier base and the local suppliers’ direct contribution to local economy. Council seeks to build a focused relationship with its suppliers by: a Whenever or wherever possible seeking out potential local suppliers;

b Researching local suppliers capabilities;

c Planning procurement with local business and industry;

d Encouraging contractors to provide opportunities for local suppliers to participate in contract delivery;

e Recognising the capabilities of local suppliers in contract specifications;

f Actively encouraging local suppliers to respond to Council’s invitation for tenders and quotations;


ITEM 1 (CONTINUED) ECONOMIC STIMULUS MEASURES – FUNDING REPORT CM787/789/04/01(P1) g Providing opportunities for suppliers to be informed of Council’s purchasing policies

and procurement activities and planning; and

h Providing feedback, performance counselling and debriefing to suppliers. To provide a perspective of Council’s performance in the area of supporting local business, expenditure with local suppliers has been reviewed. In 2007/08, Council spent approx $236 million with local businesses. In addition, 15 out of 50 of Council’s top suppliers are local with an approximate spend of $78 million. To further support local business, Council is extremely conscious of its payment performance and its current trading terms are 30 days from receipt of a properly prepared invoice. This financial year to date, Council has paid an average of 94.5% of invoices within trading terms. The 5.5% that are paid outside of terms relate to disputed invoices awaiting credit notes, incorrectly prepared invoices, invoices that are awaiting some form of evidence that the Good or Service has been provided or failure on the requisitioners’ behalf to approve payment in time. To ensure suppliers are paid in a timely fashion, two payment runs per week have been implemented with the second run being instigated for those suppliers that are paid via EFT. EFT provides immediate funds in the supplier’s bank account and removes the requirement for cheques to be cleared. Council actively encourages suppliers to be paid via EFT due to the efficiencies this creates for all parties involved. Whilst Council currently expends considerable funds within the local economy, some policy decisions could be made to increase the spend with local suppliers. Such initiatives may include adopting a recognised allowance that Council is willing to afford to the price of local goods and services in recognition of the benefits that local transactions bring to the City. Some Councils achieve this through allowing a percentage only and some are a little more prescriptive. For example, Scenic Rim Regional Council allows a 3% percent allowance up to a maximum of $500 on purchases that are above $100. Council could implement such a change to its existing policy and apply an allowance or some form of consideration to local goods and services. However some work would be needed to determine an appropriate mechanism and its practical application in day to day procurement. Consideration would also need to be given to the mechanics of such a change, particularly around encouraging local suppliers to be competitive and ensuring that local suppliers are doing their best to provide competitive prices, quality goods and services and reliable delivery performance. Such a policy position would need to ensure that it doesn’t support higher priced or inefficient suppliers. There is a difficulty at the moment in identifying the cost of such an initiative, as there is insufficient data available to ascertain the additional cost versus the increase in the number of local transactions. Recently Council raised the possibility of applying a “Buy Australian” policy. Whilst such an initiative has merit and should be encouraged, it is viewed that employment within the City is a more realistic proposal given that there may well be a number of Gold Coast suppliers that trade in imported products but have a large employee base to distribute, service and sell their products. Initial research suggests that the definition of ‘made in Australia’ is problematic and may be difficult to implement. Hence, it is recommended that the application of some form of allowance or mechanism to assist competitive local suppliers be further considered in the first instance.


ITEM 1 (CONTINUED) ECONOMIC STIMULUS MEASURES – FUNDING REPORT CM787/789/04/01(P1) 5.6 Gold Coast Rescue Patrol 2009 On Friday 20 March 2009 a range of Gold Coast Rescue Patrol 2009 delegates met to discuss the current economic environment in relation to a range of areas including: a Business development;

b Development / construction;

c Education / health;

d Entertainment;

e Environment / lifestyle;

f Governance;

g Infrastructure;

h Law & order; and

i Tourism. It should be noted that the subject matter of this Council report precedes the Rescue Patrol 2009 event. A range of ideas were put forward, those that are relevant to the stimulus package include: a Commercial caravan – for national and international city promotion.

b Identification of the next industry of expansion.

c Fund a new product rebate of $20,000 for new build investors – funded through developer infrastructure charges;

d Examination of planning documents to fast track commercial and residential property development;

e Create a festival to assist all areas of the business community;

f Approval of Council’s stimulus package with addition of Seaway Bypass project and the Ormeau Service road gap.

g Implement the rapid transit system even if Council needs to start without State government support;

h Implement infrastructure including Broadwater development, CARRARA stadium, water, sewage, roads;

i Tourism incentive package developed to drive market audience; and

j Strategic Broadwater plan produced including construction of a cruise ship terminal. For example, in relation (f) the Seaway Bypass project a previous report on the Surfers Paradise foreshore redevelopment outlined the opportunity to ‘backpass’ (send south) sand back from The Spit sand bypass system to nourish beaches north from Nobby Headland. The Stage one project includes the construction of permanent booster pump stations and pipe-work infrastructure from The Spit to Surfers Paradise. The sand pumped on beaches from the system will improve protection to coastal infrastructure and mitigate impacts after storm events. The order of cost is around $3 to $5m. Queensland Transport officers have expressed in-principal support for this project. Amongst other benefits the system would:


ITEM 1 (CONTINUED) ECONOMIC STIMULUS MEASURES – FUNDING REPORT CM787/789/04/01(P1) a Provide permanent infrastructure and capacity to nourish Gold Coast beaches

b Provide protection against sand dune scarping during storm events

c Provide and maintain a larger storm buffer

d Avoid costs of damage to public and private assets

e Improve ability to efficiently manage beach conditions in response to storm events, climate change and sea level rise

f Potentially assist in the reduction of costs and environmental impacts in comparison to existing beach nourishment programs

g Protect the local tourism economy dependant on the accessibility and attraction of the beach environment

Queensland Transport commissioned a report in 2001 that identified opportunities to improve the efficiency of the current system and to increase the system’s ability to intercept and bypass sand. Queensland Transport is currently investigating the cost to revise and update that study. There are opportunities to integrate this revision with the backpassing project, at a minimum by running the projects in parallel, or possibly by combining one or more activities. A key element of the backpassing study would be to better understand coastal sand movement processes in order to determine how much sand can be backpassed. The implications of the establishment of a permanent beach nourishment system on policies related to Broadwater sand resources will also be evaluated. Queensland Transport has prepared the Access Needs Study to identify a program of dredging work to establish and maintain a network of navigation channels that meets industry needs. The Study is also designed to facilitate better contracting and permitting arrangements, as well as stakeholder collaboration, to reduce costs and improve outcomes. A key issue affecting costs is the resource entitlement to dredged sand. It is important to complete the studies on the bypass upgrade, backpassing and coastal sand dynamics in a timely manner to better understand this opportunity and to fast track the delivery of what could be a long term beach protection solution. These projects and activities have not been considered in any detail at this time. However, it is intended that a further report be brought before Council responding to these ideas and detailing options for implementation. 6 STATUTORY MATTERS Chapter 5 of the Integrated Planning Act 1997(IPA) does not specifically detail how subsidies are to be funded. Section 5.1.7 states that the infrastructure charge must be for a trunk infrastructure network that services, or is planned to service, premises and is identified in the PIP. 7 CORPORATE/OPERATIONAL PLAN Strategic Priority 13 Land Use & Development Control - To achieve the following outcomes:

13.1.1 A robust framework for the management of new development to ensure integrated land use, transport, environmental and social planning.

13.1.3 Appropriate public infrastructure is supplied in a manner that ensures efficient use of resources.


ITEM 1 (CONTINUED) ECONOMIC STIMULUS MEASURES – FUNDING REPORT CM787/789/04/01(P1) Strategic Priority 10 Diversify and Strengthen the Economy - To achieve the following outcomes: 10.1.2 Increased employment opportunities.

10.1.3 Increased export development.

10.1.5 Delivery of the necessary planning and infrastructure to ensure the continuing development of sustainable tourism within the city.

10.3.3 Continue to work within the Pacific innovation Corridor Centres to foster Cluster Development and city-wide access to the infrastructure needs of business with a focus on cost effective high speed telecommunications infrastructure.

10.3.6 To support infrastructures to retain workforce skills and knowledge based industries as catalysts for buoyant economic activity.

Strategic Priority 9 City Assets - To achieve the following outcomes: 9.1.3 Ensure appropriate levels of funding for city assets Strategic Priority 8 City Transport Improvement - To achieve the following outcomes: 8.1.6 Effective integration of transport, land-use planning and growth management Strategic Priority 13 Land Use & Development Control - To achieve the following outcomes:

13.1.1 A robust framework for the management of new development to ensure integrated land use, transport, environmental and social planning.

13.1.2 An effective Planning Scheme and Local Laws which advance ecologically sustainable development

13.1.3 Appropriate public infrastructure is supplied in a manner that ensures efficient use of resources.

8 COUNCIL POLICIES • Investment Policy • Credit Risk Policy • New Instrument Policy • Borrowing Policy 2008-2009 • Priority Infrastructure Plan • Infrastructure Policy for Water Supply Network 3A • Infrastructure Policy for Sewerage Network 3B • Purchasing Policy • Local Purchasing Opportunities Policy 9 DELEGATIONS If Council were to proceed with subsidising or deferral of infrastructure charges, suitable delegations would need to be determined to facilitate the new business processes effectively.


ITEM 1 (CONTINUED) ECONOMIC STIMULUS MEASURES – FUNDING REPORT CM787/789/04/01(P1) 10 BUDGET/FUNDING 10.1 Direct Council Expenditure - Projected Cash Flow and Economic Benefits The following table provides the cash flow estimates and the economic impact (in dollars and employment) calculated using Council’s Economic Modelling Tool model for each of the stimulus projects:

Project Cash Flow & Economic Benefits

Project Directorate Total Economic Impact Full Time Equivalent (FTE) Jobs

Proposed Project Cash Flow

Funding Already Included in 2009-10 Budget

Additional Funding Required

08/09 09/10 10/11 Surfers Paradise Foreshore Redevelopment

EDMP $24.5m 217 FTE

$0.145m $18m $7m $0.145m $25m

Southport Broadwater Parklands Stage Two South

$14.55m $1.75m $0.5m $16.3m

Southport Broadwater Parklands Stage Two North

CS and EDMP

$46.2m 1,270 FTE

$0.5m 1

Refer to end of table

Gold Coast Industry Investment Attraction Project

EDMP $150m 3 1,500 FTE

$0 $1.3m

$1.3m

$1.3m

$1.3m

Stormwater Infrastructure Construction Function 252.9870

ES $1.5m 15-20 FTE

$1.5m

$0 $1.5m

Additional Stormwater Infrastructure Construction Function 252.9870

ES $2.7M 20-25 FTE

$2.75m

$0 2.75m

Major Roads Projects Function 257.6893

ES $12.1m 105-110 FTE

$12.35m5

$0m $12.35m

Robina Space Project (Two level option)

EDMP $5.3m 50 FTE

$3.0m $2.465m $1m (Councillor contribution)

$4.465m

Selected Bikeway Projects Function 257.6850

ES $4.5m 40 FTE

$4.56m

$4.56m

Export Support for Local Firms

EDMP $30m 4 300 FTE

$015m $0 $0 $0m $0.15m


ITEM 1 (CONTINUED) ECONOMIC STIMULUS MEASURES – FUNDING REPORT CM787/789/04/01(P1)

Project Directorate

Total Economic Impact Full Time Equivalent (FTE) Jobs

Proposed Project Cash Flow

Funding Already Included in 2009-10 Budget

Additional Funding Required

08/09 09/10 10/11 Carrara Stadium Redevelopment (Component of $130m first stage works)

EDMP Total - $1.45billion over 10yrs Construction $130m + $110m flow on over 10yrs AFL Team - $75m per annum, $127m flow on over 10yrs Sports tourism $34m per annum over 10yrs Total – 2794 FTE 813 construction jobs 490 flow on FTE’s over 10yrs 167 direct jobs (AFL team), 896 flow on FTE’s over 10yrs 428 FTE sport tourism FTE’s over 10yrs

$0 $20m 0 $20m $0

Accommodation Project (Pending Evandale masterplan)

EDMP TBA TBA TBA TBA TBA TBA

TOTAL Budget $1.7268b 6,326 FTE

$0.795m $78.01m $12.515m $22.945m $68.375m

Projects Contingent on Receiving Additional Funding Southport Broadwater Parklands Stage Two South2

Included in economic benefit reported above.

$29.95m2 $0.75m2 $15.35m (Funding application to be made to the State govt)

$15.35m (if State government provides 50% funding)

Total Additional Funding Required

$0.795m $107.96 m

$13.265m $38.295m $83.725m

Notes to Project Cash Flow & Economic Benefit Table 1 Denotes funding brought forward to expedite site investigation and detailed design for stage 2 works which enables a managing contractor and design team continuous works on transition from stage 1 to stage 2. 2 The cost of the Southport Broadwater Parklands Stage 2 South totals $30.7m, the progress of this stage is contingent on 50% of the funding from State Government ($15.35m from each party)

3 Estimated economic impact is the investment attraction target set for this project. 4 Estimated economic impact based on exporter growth and sales in the city from the 2007/2008 export program. Economic impacts to occur over the longer term than just the 2 year stimulus funding period. The economic impact is generated from the capacity of business to generate export sales and with a continued targeted export program the economic benefits from the stimulus funding can be achieved.


ITEM 1 (CONTINUED) ECONOMIC STIMULUS MEASURES – FUNDING REPORT CM787/789/04/01(P1) 5The additional roads projects have already been included in the draft 2009-10 budget along with additional loan funding to be funded by an increase in the Transport Levy in future years. This extra work was required to keep the Engineering Services road construction staff fully employed for the financial year, as significant funds are required for land purchases in 2009-10 which reduced money available for road construction. The multipliers utilised for the purposes of performing impact assessments are based on a localised version of the national input-output table, with the base information being the year 2004-2005 National Input-Output tables produced by the Australian Bureau of Statistics. These are the latest available national tables. An assumption behind all input-output models is that industry dynamics are static, when in reality an economy will evolve over time. The multipliers are calculated based on sound methodology; however should be viewed as having a theoretical element. They are estimates of the potential impacts associated with the project, and do not completely reflect phenomenon such as the economy evolving differently as a result of the project and, for example, local industries changing their business operations to better capture the benefits of the impacts. Nonetheless, the results produced by using the multipliers generated by the input-output tables will provide reliable information regarding the impact under current conditions and interactions. The Value Add multiplier is presented across 1 digit Australian and New Zealand Standard Industry Classification (ANZSIC) codes with the average being 1.12. One important limitation is the difficulty in obtaining information on all expenditures associated with any given project and the destination location of those expenditures, which enable a non-theoretical understanding of the geographic distribution of all impacts. Therefore the economic impacts must be viewed in a broad context and must be interpreted as an order-of-magnitude estimate only. 10.1.2 Impact on the Gold Coast Ratepayer The main aim of bringing forward projects into the 2009-10 budget is to keep people employed. The expected flow on benefits of the stimulus package for the economy are contained in the table above. However, providing this stimulus comes at a cost to the Gold Coast ratepayers. To adopt the stimulus package, Council is effectively spreading the cost of providing additional jobs across all ratepayers. The funding options will be discussed later in this report, but loans can be an effective means of funding a package such as this as it pushes the bulk of the cost out to future years when the economy may have returned to normal growth. However, the package still requires raising extra revenue when the community may least be able to absorb the costs. The following points should be considered when deciding what action is best for the City as a whole:

• The Commonwealth government is providing stimulus by giving cash handouts to families and low and middle income earners. Raising Council rates above what would normally be required takes the money out of the pockets of those people and redirects them toward a smaller section of the community, including high earning business owners.

• Leaving cash in the pockets of the average ratepayer by keeping rates low provides a stimulus in itself in that the average person has more money for discretionary spending.


ITEM 1 (CONTINUED) ECONOMIC STIMULUS MEASURES – FUNDING REPORT CM787/789/04/01(P1) • Based on general advice given by the IMF, QTC and other economic forecasters,

inflation, interest rates and unemployment are all likely to rise before the end of the current economic downturn, placing continued pressure on the average ratepayer. Careful consideration should be given to whether it is best to increase rates and increase the infrastructure program or to keep rates as low as possible, but spend less in the community.

• Not all the stimulus provided will be kept within the City. The cost, however, will be fully borne by the Gold Coast ratepayer.

• Increasing rates significantly may result in a higher default rate on rate payments. 10.1.3 Funding Options The total stimulus package, excluding the Broadwater Parklands South project is $90.15m. Of this amount funding has already been identified for the following:

• Carrara stadium- $20m is being held in reserve from cash associated with the bulk water reform.

• Robina Space- $1m has been allocated from divisional funds.

• Broadwater Parklands North- $0.5m in the 2008-09 budget

• Surfers Paradise Foreshore- $0.145m in the 2008-09 budget. There is no funding readily available for the remaining $68.5m and it is proposed that this will be funded by loans. If the loan is draw down with a 15 year term, Council will need to fund debt service payments of $7.4m each year from 2010-11. In addition to the debt service cost, each of the projects will add to the operating budget. Based on the assumption that annual operating costs will be 5% of the capital spend, this adds a further $4.5m to the annual budget. Given the financial outlook in the long term financial sustainability model, an additional $11.9m could not be sustained without increasing revenue. Council has two options for funding these additional costs:

1 Increase the general rate by 4.1% over and above what would normally be approved.

2 Reduce the subsidy discount by 5% (a discount reduction of 4.25% would be required to fund the cost, but for simplicity this would be rounded to a 5% reduction in the discount).

Naturally, the options above will have a financial impact on ratepayers which needs to be considered in the current economic climate. Information to date indicates that Council will have a higher than expected level of rate arrears at the end of the 08/09 financial year. Hence any the impacts of an increase would need to be carefully considered. To keep the general rate increase (or discount reduction) to a minimum, the loans required for the additional roads program could be serviced by an increase in the Transport Levy rather than being funded from general rate revenue. The financial impact of this increase on ratepayers would also need to be considered.


ITEM 1 (CONTINUED) ECONOMIC STIMULUS MEASURES – FUNDING REPORT CM787/789/04/01(P1) 10.1.4 Inclusion of Broadwater Parklands Stage Two North It is the position of this report that the Broadwater Parklands North project does not proceed as part of the stimulus package unless 50% funding can be obtained from the State government. If this funding can be secured and Council wish to proceed with the project, a further $15.35m of loan funding will be required. An additional $1.5m will also be added to the operating budget. Under this scenario, Council will need to raise a further $1.7m for debt service payments and an additional $1.5m for operating costs, giving a total required annual increase of $3.2m. This represents an additional 1.1% rate increase, bringing the required rate increase for the total combined package to 5.2% over and above what would normally be approved. 10.2 Developer Subsidy Options Should Council choose to progress any of the infrastructure subsidy options there will also be budget impacts. Council's statutory obligations in relation to funding subsidies ensures that planned infrastructure is constructed to support new approved developments and existing residents to meet the standards of service detailed in the PIP and Infrastructure Policies. The funding required to subsidise an infrastructure charge will be substantial. Council could consider a maximum subsidy provision amount cap to limit its expenditure and financial risk and undertake regular reviews to determine if the subsidy is achieving the desired economic stimulus. Council may need to top-up the infrastructure trust funds to ensure that Council's capital works programs can proceed on time. Options for funding sources are as follows: 10.2.1 Option 1 - Rates Increase with No Loan Funding The deficit in required infrastructure charges collected created by any subsidy is subsidised by an increase in rates. Each $2,700,000 of subsidy funding equates to approximately a 1% rate rise in the following year. If a revenue funded subsidy of infrastructure charges is provided for 2009/2010, the following rate increase is estimated:

10% 2.7% increase in rates for 2010/2011

25% 6.8% increase in rates for 2010/2011 10.2.2 Option 2 - Loan funded subsidy over a number of years The deficit in infrastructure charges collected that occurs as a result of subsidisation is subsidised by loan funding. This level of subsidisation would then equate to approximately $1,830,000 in interest and redemption costs funded from the general rate for the 15 subsequent years. Each $10,000,000 of loan funding currently equates to approximately $1,000,000 in interest and redemption payments over a 15 year term. This means for subsidization of infrastructure charges in 2009/2010, rates are estimated to increase by

10% 0.27% for the following year and will also impact the next 14 years. 25% 0.68% for the following year and will also impact the next 14 years.


ITEM 1 (CONTINUED) ECONOMIC STIMULUS MEASURES – FUNDING REPORT CM787/789/04/01(P1) 10.2.3 Option 3 - Funds diverted from other areas Each year ratepayers funds are allocated to capital works and a variety of other initiatives within the budget. Current capital works programs are also partly funded by PIP and Infrastructure Policy contributions. This option considers reallocating those ratepayer funds to provide a subsidy of infrastructure charges. This means that less funds will be available for capital works and other initiatives in future years, and that Council will not achieve its capital program objectives. This would also decrease any stimulus effect as revenue is shifted from one area to another and does not increase the overall capital spending and other initiatives program. For example, the roads program is approximately 25 - 30% funded by infrastructure charges. The rest is funded by loans, government subsidies and ratepayer funds. If the infrastructure charge funded infrastructure is further subsidised, the mix of funding skews further toward the ratepayer for loan repayments and rate funding. 10.2.4 Option 4 – Lobby State and Federal Government Council could explore other avenues to provide funding to support a subsidy to infrastructure charges and it may be worth approaching State and Federal Governments to create an infrastructure fund to fund such shortfalls. 10.3 Developer Subsidy - Deferral of Charges & Budget Impacts Council would have to construct new administration processes at considerable cost for managing new payment arrangements. Bank Guarantees may need to change over time to keep up with new configured lots which would be the subject of the security. 10.4 Developer Subsidy - Loan Funding & Infrastructure Charges If Council chooses to subsidise infrastructure charges, the burden of that subsidy will be borne by the ratepayers of the City resulting in an increase in the general rate, extra interest and redemption on loans, or decreased infrastructure provision to support the City. Council could choose to allocate a set amount of funding within an Infrastructure Charges Subsidy Scheme and that once this allocation has been expended no further subsidy be provided. This would provide an initial method of addressing the concerns limiting development within the city during the current economic downturn while providing a period of time for its effectiveness to be measured. This could be achieved by Council allocating an amount of $4million ($2million be allocated in the 2009/10 and 2010/11 budgets). 11 COORDINATION & CONSULTATION In developing this report co-ordination and consultation has taken place with officers from the: • Office of the CEO

• Community Services Directorate

• Engineering Services Directorate


ITEM 1 (CONTINUED) ECONOMIC STIMULUS MEASURES – FUNDING REPORT CM787/789/04/01(P1) • City Governance Directorate

• PET Directorate

• Organisational Services Directorate 12 TIMING It is proposed that the economic stimulus projects would be implemented once Council has approved the projects and secured the necessary borrowings from Queensland Treasury. 13 STAKEHOLDER IMPACTS Significant construction activity would take place in the city resulting in major employment generation the local workforce, economic flow on to the broader economy would result from the local purchase of goods and services and local firms contracted to these projects would be able to have some certainty with retaining staff and growing their business through these difficult economic times. The community would gain access to upgraded or new community infrastructure now rather than into the future meaning an improved delivery of services by council to Gold Coast residents. The result will be a stronger economy for the city, companies will be better positioned for when the economy improves and the Gold Coast community will benefit from the injection of much need money into the local economy and the provision of new or upgraded council assets. 14 CONCLUSION The Gold Coast economy has felt the effects of the global financial crisis. Of particular note the construction and development sector has experienced a significant downturn in activity with extensive workforce layoffs. This in turn has major additional indirect economic impacts across the city. A strong program of Federal, State and Local Government works is important at this time to ensure the construction sector activity remains at reasonable levels during the current downturn. Council has an opportunity to provide a local economic stimulus measure of its own by implementing the identified projects and activities. In relation to developer subsidies, if Council chooses to provide a stimulus using infrastructure charges, a subsidy is recommended in the short term as it would be able to be efficiently managed and could apply to developments immediately. Funding could be sourced either directly from the annual budget through cuts to other areas of the budget, through a general rate increase, or loan funded. The Council could choose a suitable maximum amount to fund the subsidy. The package should commence as soon as practical, at $4million for a 2 year period or until the identified funds are exhausted. Council should form a policy on how the subsidy would be administered. There is already significant work being undertaken to streamline developer approval process to ensure development activity is assisted as far as possible. There are a variety of activities already implemented to achieve this, in particular working in collaboration with the Urban Development Institute of Australia (UDIA) on a 50-point plan to improve the service to industry.


ITEM 1 (CONTINUED) ECONOMIC STIMULUS MEASURES – FUNDING REPORT CM787/789/04/01(P1) The value and strength of the local supplier base and the acknowledgement that local suppliers’ have a direct contribution to local economic benefit led to the establishment of Council’s Local Purchasing Opportunities Policy. This policy should be reviewed to ensure that the opportunities for Local Businesses to Supply Council with Goods and Services are maximised. The ideas raised at the Gold Coast Rescue Patrol 2009 will be addressed in a further report to Council. 15 RECOMMENDATION It is recommended that Council resolves as follows: 1 That Council endorse the following projects as part of the economic stimulus package

at a total cost of $122.02million:

a Surfers Paradise Foreshore Redevelopment - $25.145million

b Gold Coast Industry Investment Attraction Project - $2.6million

c Stormwater Infrastructure Construction – $1.5million & $2.75million

d Major Roads Projects - $12.35million

e Robina Space Project - $5.465million

f Selected Bikeway Projects - $4.56million

g Export Support for Local Firms - $0.15million

h Southport Broadwater Parklands - $16.8m plus $30.7m contingent on state funding 50% ($15.35m)

i Carrara Stadium Redevelopment - $20m

2 That the loan funds required to fund projects a,c,d,e,f and h identified in recommendation 1 above be included in the March budget review and 2009-10 draft budget loan programs, as appropriate.

3 That a further report be brought forward as a matter of urgency regarding additional measures that may be undertaken as outlined by the Rescue Patrol 2009 forum on 20 March 2009.

4 That Council endorse the options for developer assistance detailed in this report and that of those the preferred option is to subsidise infrastructure charges for the period July 2009 to June 2011.

5 That a policy position be developed and endorsed by Council that will support the administration of the subsidy including, but not limited to:

a Appropriate conditions to qualify for the subsidy;

b Direction that ensures that the subsidy scheme will not apply to the ‘pre-payment’ of infrastructure charges;

c Work trust funds for Roads, Recreation, Stormwater, Water and Sewerage;

d The preferred arrangements to finance the subsidy scheme;

e The maximum amount to be allocated to finance the scheme;

f Start and finish dates for the subsidy scheme to operate;



g Review arrangements that might apply during the life of the scheme; and

h Legal advice be obtained in relation to whether the provision of a financial benefit to various enterprises will trigger the enterprise powers provisions in the Local Government Act 1993.

i Further economic advice be obtained from a market economist to determine if the recommended option will provide genuine short term economic stimulus to the Gold Coast economy.

6 That, subject to the finalisation of a policy position, Council allocate an amount of $4million ($2million be allocated in the 2009/10 and 2010/11 budgets) with an Infrastructure Charges Subsidy Scheme and that once this allocation has been expended no further subsidy be provided.

7 That Council note the significant progress being made toward streamlining of the development approval process for projects deemed of significant economic value and support the continuation of this work.

8 Council note the advice in the report regarding the status of current actions to support local business and that a further report be presented to Council by the end of April 2009.

9 That the Advocacy Officer investigate potential Australian and State Government funding opportunities to add additional value to the stimulus package.

10 That the CEO convey a copy of this report to:

a The Premier; the Hon Anna Bligh MP;

b BusinessGC Advisory Board members;

c Chief Executive and General Counsel, Mr Brian Stewart, Urban Development Institute of Australia; and

d Executive Director, Mr Steve Greenwood, Property Council of Australia.

Author: Authorised by: Grayson Perry Darren Scott Manager Economic Development Director Economic Development and Major Projects March 2009


ITEM 1 ECONOMIC DEVELOPMENT BRANCH ECONOMIC STIMULUS MEASURES – FUNDING REPORT CM787/789/04/01(P1)

Committee Recommendation Changed at Council 3 April 2009 Changed Recommendation COMMITTEE RECOMMENDATION ED09.0331.001 moved Cr Young seconded Cr Clarke 1 That Council endorse the following projects as part of the economic stimulus

package up to a total cost of $122.02million: a Surfers Paradise Foreshore Redevelopment including public toilets in Cavill

Mall - $25.145million b Gold Coast Industry Investment Attraction Project - $2.6million c Stormwater Infrastructure Construction – $1.5million & $2.75million d Major Roads Projects - $12.35million e Robina Space Project - $5.465million f Selected Bikeway Projects - $4.56million g Export Support for Local Firms - $0.15million h Southport Broadwater Parklands - $16.8m plus $30.7m contingent on state

funding i Carrara Stadium Redevelopment - $20m


3 That the CEO convene a workshop of Councillors and the Gold Coast Rescue Patrol 2009 ‘captains’ to consider additional or alternative measures that might be undertaken to provide economic stimulus in the City.

4 That Council note the significant progress being made toward streamlining of the development approval process for projects deemed of significant economic value and support the continuation of this work.

5 Council note the advice in the report regarding the status of current actions to support local business and that further report be presented to Council which will seek to improve the capacity of Council to provide that local support.

6 That the Advocacy Officer investigate potential Australian and State Government funding opportunities to add additional value to the stimulus package.

7 That the CEO convey a copy of this report to: a The Premier; the Hon Anna Bligh MP; b BusinessGC Advisory Board members; c Chief Executive and General Counsel, Mr Brian Stewart, Urban

Development Institute of Australia; and d Executive Director, Mr Steve Greenwood, Property Council of Australia.

A division was called. For: 6 Cr Clarke, Cr Douglas, Cr Grummitt, Cr Grew, Cr Young, Cr Betts Against: 0 NIL Absent: 0 Abstained: 0

CARRIED


ITEM 1 ECONOMIC DEVELOPMENT BRANCH ECONOMIC STIMULUS MEASURES – FUNDING REPORT CM787/789/04/01(P1) CHANGED AT COUNCIL 3 APRIL 2009 RESOLUTION G09.0403.011 moved Cr Douglas seconded Cr Young That Committee Recommendation ED09.0331.001 be adopted with a change to part 1h such that it reads in entirety as follows: 1 That Council endorse the following projects as part of the economic stimulus

package at a total cost of $122.02million: a Surfers Paradise Foreshore Redevelopment including public toilets in Cavill

Mall - $25.145million b Gold Coast Industry Investment Attraction Project - $2.6million c Stormwater Infrastructure Construction – $1.5million & $2.75million d Major Roads Projects - $12.35million e Robina Space Project - $5.465million f Selected Bikeway Projects - $4.56million g Export Support for Local Firms - $0.15million h Southport Broadwater Parklands - $16.8m plus up to $30.7m contingent on

state funding i Carrara Stadium Redevelopment - $20m


3 That the CEO convene a workshop of Councillors and the Gold Coast Rescue

Patrol 2009 ‘captains’ to consider additional or alternative measures that might be undertaken to provide economic stimulus in the City.

4 That Council note the significant progress being made toward streamlining of

the development approval process for projects deemed of significant economic value and support the continuation of this work.

5 Council note the advice in the report regarding the status of current actions to

support local business and that a further report be presented to Council by the end of April 2009.

6 That the Advocacy Officer investigate potential Australian and State Government

funding opportunities to add additional value to the stimulus package. 7 That the CEO convey a copy of this report to:

a The Premier; the Hon Anna Bligh MP; b BusinessGC Advisory Board members; c Chief Executive and General Counsel, Mr Brian Stewart, Urban

Development Institute of Australia; and d Executive Director, Mr Steve Greenwood, Property Council of Australia.

CARRIED



ATTACHMENT 1 Council, at its meeting of 23 February 2009, resolved in part (G09.0223.005):

“1 That detailed individual proposals be developed and submitted to Council as a matter of urgency for the six recommended economic stimulus projects identified in the report. These being;

• Surfers Paradise Foreshore Redevelopment • Gold Coast Industry Investment Attraction Project • Stormwater Infrastructure Construction • Major Roads Projects • Robina Space Project • Selected Bikeway Projects • Export Support for Local Firms • Southport Broadwater Parklands – (Project Cost $47,500,000)

2 That the Chief Executive Officer write to any relevant state and/or federal agencies that

will need to issue permits and/or approvals for projects approved by Council for funding under the Gold Coast economic stimulus package, seeking assurances from these agencies that any relevant permits and approvals will be expedited to ensure that project implementation may take place as quickly as possible.”

Council, at its meeting of 12 December 2008, resolved in part (G08.1212.019): “2 That Council notes the report and the current measures in place to assist the

construction and development industry in the city, including the legitimate negotiation between Council developers regarding reductions in infrastructure charges.

3 That the Chief Executive Officer (Director PET) brings a further report to Council in

respect to the potential issues and impacts of implementing a policy in regards to deferral mechanisms of infrastructure charges and/or public benefits related to floor space bonus provisions derived from Policy 18, for developments in the city

4 That the Chief Executive Officer (Director City Governance, brings a further report to

Council outlining the financial impact to Council of additional borrowings to bring forward funding of infrastructure works that are currently allocated to future budget years, and that a workshop be held to determine indicative priority.

5 That the Chief Executive Officer (Director EDMP) brings a further report to Council

outlining in detail the economic and industry development initiatives that could be implemented to stimulate the local economy during the current economic crisis.”

Council, at it’s meeting of 12 December 2008, resolved in part (G08.1212.019): “2 That Council notes the report and the current measures in place to assist the

construction and development industry in the city, including the legitimate negotiation between Council developers regarding reductions in infrastructure charges.

3 That the Chief Executive Officer (Director PET) brings a further report to Council in

respect to the potential issues and impacts of implementing a policy in regards to deferral mechanisms of infrastructure charges and/or public benefits related to floor space bonus provisions derived from Policy 18, for developments in the city.



ATTACHMENT 1 4 That the Chief Executive Officer (Director City Governance, brings a further report to

Council outlining the financial impact to Council of additional borrowings to bring forward funding of infrastructure works that are currently allocated to future budget years, and that a workshop be held to determine indicative priority.

5 That the Chief Executive Officer (Director EDMP) brings a further report to Council

outlining in detail the economic and industry development initiatives that could be implemented to stimulate the local economy during the current economic crisis.”

Council at it’s meeting of 16 February 2009, resolved (G09.0216.021) 1 That, further to part 2 of Council Resolution G08.1212.019 (ED08.1209.008), the Chief

Executive Officer include within that report an analysis of the economic benefits and financial impacts of:

a subsidising the various components of the City’s Infrastructure charges during

the 2009/2010 financial year, should the global economic downturn continue to worsen, by between 10% and 25% on pre-established conditions such as construction on site commencing within the year, the estimated time for completion is met (unless otherwise agreed through exceptional circumstances), building contract price is attained, Gold Coast sub-contractors are employed and the quality of construction meetings Council’s standards.

b the total of all infrastructure charges being limited to less than 5% of the total

project cost (including land purchase and mortgage/bank holding charges). 2 That the report include a review of the infrastructure charges methodology to

investigate the appropriateness of Planning Scheme Density versus Actual Application Density, and to establish a calculation formula which allows an apportionment of charges applied to small scale development.

3. That the report be presented to the Economic Development



ATTACHMENT 2 ECONOMIC STIMULUS PROJECT DESCRIPTION

Project Name Surfers Paradise Foreshore Redevelopment Investment Benefit Bring Forward of Infrastructure Project

Project Objective To re-develop a world class foreshore area in the city’s key tourist precinct stretching from View Avenue to Clifford Street, Surfers Paradise

Project Description The Surfers Paradise Foreshore project is the master planned redevelopment of the foreshore focused on beautification and improving the aesthetics and amenity of the Surfers Paradise precinct. Juniper Development Group’s Soul development has an approval condition to upgrade approximately 50% of the central foreshore area defined as the Urban Plaza zone and it is estimated that Juniper’s foreshore works will be complete by December 2009. While there is a development approval condition issued for the redevelopment of the Iluka property to upgrade the remainder of the Urban Plaza zone, the developers (Raptis Group) have listed the property for sale due to economic hardship. There are no other planned or mooted development projects along the foreshore that could currently contribute to the implementation of the Masterplan. Whilst it is envisioned the foreshore redevelopment is to be eventually funded by developer contributions, it is proposed that council undertake the works in full now rather than awaiting for the developer contributions and complete only those components of the project which are developer funded (ie the Soul development). If Council continues its original plan to wait for incoming developer contributions an obvious disparity of streetscaping and public amenity will exist along the foreshore after Juniper’s works are completed. A significant risk exists with this plan in that the inconsistency of works along the foreshore could be evident for approximately 10-15 years, in which time the works in front of Soul will begin to become outdated and worn. This is not a favourable outcome for a site such as Surfers Paradise and contradicts the intent of the Masterplan to revitalise the foreshore to befit its reputation as a world class tourist destination. The most suitable outcome for the long term benefit of the Surfers Paradise foreshore is to have the redevelopment occur as one project not multiple projects over time (with developer contributions being provided to Council when development occurs in the future). The end result will be the delivery of a world class foreshore which the city can be proud of.



ATTACHMENT 2

Economic Impact/Outcome

This project, will create 217 jobs during the redevelopment phase with the total economic impact to the Gold Coast economy in excess of $24.5 million. The economic benefits are considered conservative as they do not account for the on-going use of the foreshore once it has been redeveloped. The use of the foreshore by tourists, residents, the workforce and from local events will have on-going additional economic benefits to the Gold Coast.

Project Cost / Funding Source (cash flow details)

It is estimated that the section of the Urban Plaza zone that does not include the foreshore works being undertaken by Juniper (in front of Soul) is $10 million, which excludes the Masterplan option to move the road behind the Surf Lifesaving Club. Further, it is estimated the remaining Masterplan area would cost $15 million, which totals $25 million required to complete the implementation of the Masterplan, excluding the works in front of Soul. The implementation costs include detailed design and construction drawings, EPA application costs and fees and construction.



ATTACHMENT 2 Project Name Southport Broadwater Parklands

Investment Benefit Bring Forward of Infrastructure Project Project Objective The objectives for the redevelopment of the Southport Broadwater Parklands are:

• To develop a foreshore park that incorporates world class design and provides a range of facilities and experiences for both locals and visitors to the Gold Coast;

• To reconnect the Southport CBD back to the Broadwater;

• To provide modern interpretation of historical infrastructure;

• To provide a facility to commemorate and celebrate 150 years of Queensland as a separate state from New South Wales;

• To make public art integral to the redevelopment to provide an effective and important means of generating a strong, wide-reaching sense of community and regional identity;

• To provide economic stimulus by creating employment opportunities during delivery of the project and in the management of the facility;

• To design for energy efficiency and water sustainability; and

To provide an events space for the City that will accommodate high profile events such as the Gold Coast Marathon, the Pan Pacific Games and the World Championship Triathlon.



ATTACHMENT 2 Project Description The Southport Broadwater Parklands is intended to become one of the world’s great foreshore parks. Incorporating

exemplary landscape, urban and environmental design, the foreshore forms both an iconic gateway for the city and a destination for the region. It will be a popular people place, combining events, history and water to create an active green waterfront for the city of Southport.

The projects comprises a master plan for the entire Southport Broadwater Parklands precinct with Stage 1 currently under construction.

Stage Two area:

In order to complete this Stage two remaining area within the overall Masterplan it is now proposed that funding of the additional $47 million required be provided by Council in order to complete the project as part of an economic stimulus project for the city (the Stage 2 component of this project is currently unfunded). The infrastructure elements that will be completed as part of the stage two works are as follows:

• A pier along the Steven Street alignment;

• A new boat ramp that will provide access to the Broadwater at the northern area of the parklands and carparking;

• The site will facilitate a total of 800 car spaces throughout to provide access to all areas of the parklands and encourage community use;

• A comprehensive bike path network that will reconnect Main Beach to Southport CBD to Labrador;

• A new visit information centre will be constructed within the northern areas to encourage tourism and commercial use of dedicated areas within the parklands (eg events/private charter activities)

• A new children's play area will be incorporated.

• New picnic facilities including barbeques, shelter, furniture will be provided throughout the whole parklands;

• A full security camera network and lighting will be installed throughout the parklands to encourage active use of the public open space at all hours similar to Southbank;



ATTACHMENT 2 • The parklands will be extensively landscaped which will including the regeneration of dunal areas, extensive tree

planting and decorative garden areas.

• There will be a depot area at the northern/southern area of the parklands to enable maintenance of the parklands. In creating these new depot areas the central pavilion will facilitate a café/kiosk and visitor information centre.

• An urban wetlands area will be constructed that collects, cleans and filters stormwater runoff from the Nind/North/Steven Street catchment prior to discharging into the Broadwater.

A skate park will be created to encourage community the attraction of events


Stage 2 of the Southport Broadwater Parklands redevelopment is estimated to have a total economic impact on the Gold Coast economy of nearly $46.2 million.

During the design and construction phase approximately 350 onsite workers will be employed for a period of 12-18 months. Furthermore a total of 100 office based staff will be employed in the design and management of construction activities during the delivery phases for a period of 12-18 months. This is total of 450 directly employed staff for this project. In addition to this the project will also create another indirect 820 jobs as a result of the project being constructed.

Tourism will be further increased similar to 'The Stand' Parklands at Townsville and 'The Esplanade Parklands' in Cairns. These locations are major tourist drawcards and the intention is for the Southport Broadwater Parklands to be just as popular or even more popular than these locations.


In order to complete the Southport Broadwater Parklands Stage Two component, an estimated total additional budget of $47.5 million is required.

The remaining areas of the parkland area (stage two) can be divided into two separate stages as follows:

Southern area: $14,300,000.00

Northern area: $33,200,000.00

Total: $47,500,000.00



ATTACHMENT 2 Note: A Managing Contractor and Design team are already engaged for the stage one area of the project and a Master plan

for the entire site has already been prepared. The allocation of the additional funding to complete the stage two component, would provide a value for money proposition due to the overheads and establishment of the existing consultants already in place and paid for. This is a highly desirable position for Council to be in when negotiating additional works with the Managing Contractor and ultimately has the ability to rapidly inject economic stimulus.



ATTACHMENT 2 Project Name Robina Space Project

Investment Benefit Bring Forward of Infrastructure Project

Project Objective The Robina Space Project is a complementary community building to enhance and improve services and space offered by the existing Robina Community Centre.

The “Robina Space” will assist:

• Severe shortage of available and suitable community venues in Robina

• Local non-government organisations struggling to find affordable office/storage space to service the community Project Description The Space Project is an efficiently designed, accessible public building meeting the requirements of the additional

community venue and office space so desperately needed at the location.

The building proposes to incorporate: • Flexible meeting space configurations • Community hall (150 pax) • Office space • Break-out foyer • Indoor and outdoor dining facilities • Commercial kitchen facilities Storage space


The Robina project is estimated to have a total economic impact to the city of $5.3 million. The project will also create 50 full time equivalent jobs.


$5.465 million – 2 storey option



ATTACHMENT 2 Project Name Gold Coast Industry Investment Attraction Project

Investment Benefit Industry Development

Project Objective This important project for the City is aimed at developing, coordinating and implementing a comprehensive and effective Industry Investment Attraction program for the City which will attract high value industry. The project will be conducted in stages to allow the effective development of precincts at critical times in the development lifecycle.

Project Description The first stage of the project will be to implement the Yatala Enterprise Area (YEA) Investment Attraction Strategy which is currently being developed and a full implementation plan will be ready to coordinate from May 2009. This Investment Attraction Implementation Strategy will include a range of strategic activities at a local, national and international level to attract, grow and develop investment, business related activity and employment in this industrial precinct. Activities ready to be implemented, should funding be identified, include the following:

• Development of targeted marketing and promotional collateral. • Identification of specific business to attract to YEA to support current business, enhance current supply chains and

create regional industry activity. • Program of targeted investment activities at a local, national and international level. • Investigation and development of incentives to provide a key 'point of difference' for YEA. • Creation of synergies and economies of scale between businesses regionally.

It is envisioned that as precincts continue to emerge that this model for investment attraction could be implemented to maximise the development of these precincts and a knowledge based economy for the City. The consistent branding of the city through all investment attraction activities is critical to its success and further reaching benefits for the city. The implementation of Stage 1 YEA focused activities will provide valuable collateral and local, national and international business and investment attraction knowledge to quickly and effectively rollout a city wide emerging precinct investment attraction strategy and implementation plan.



ATTACHMENT 2 To enable businesses to be attracted to the City a supporting targeted incentive program is to be developed in conjunction

with this investment attraction project to allow Council to actively target business and influence their relocation decisions. It is estimated that the temporary incentive fund for Stage one would require $500,000 per year for two years. This will include analysis of the feasibility of a range of potential incentives models used internationally to assist investment and development from rates rebates, capital investment, up front cash payments to assist with infrastructure and construction or developer contribution reduction.


The first stage of the project will put focus back on the YEA as a preferred location for industrial activity in South East Queensland and bring much need investment, business activity and employment to the city at a time when manufacturing and other industrial activity is facing a significant downturn. This has major impacts on long term issues such as creating enough employment opportunities for trainees and providing diverse work options for the city’s workforce. The impact of this project will be seen in the growth of existing business and attraction of new high value industry to generate a range of employment opportunities for the City. The Investment Attraction Strategy has the potential to increase the value and demand for industrial property (lease and sales) and result in the development of new premises to accommodate growing and new business. This project will have economic flow on effects for the city from the increased employment and business activity.


The first stage is to commence 2009/10 with the activities of the YEA Investment Attraction Implementation Strategy costing $150,000 per year for two years followed by $50,000 per year from 2011 to 2013 to provide ongoing support and investment attraction.



ATTACHMENT 2 The cost of incentives to attract larger firms to the precinct during these difficult economic times is estimated to be in the

order of $500,000 per year for the next two years. This amount is to be confirmed once temporary incentive strategy has been investigated and finalised as to the option that will provide the greatest benefit to businesses and the City. The second stage of the project will identify investment attraction strategies for the Cities emerging precincts and will be developed over the next 6 to 12 months for subsequent proactive implementation as per Stage 1. The project costs for Stage 1 are estimated to be $650,000 per year for two years and Stage 2 $750,000 per year for two years including the temporary incentive fund.

Stage 1 2009 to 2013 $400,000

Stage 2 2011 to 2015 $400,000

Incentive fund 2009 to 2013 $2,000,000

Total 2009 to 2015 = $2.8M



ATTACHMENT 2 Project Name Export Support for Local Firms

Investment Benefit Direct Industry Assistance

Project Objective To provide financial support to new Gold Coast City exporters who are both export ready and who have identified international markets for their products and services, to promote export and international business opportunities.

Project Description It is proposed that Council provides financial assistance to assist new exporters in the city to enter export markets over the next two years (to be reviewed after the first 12 months). Exports are an important contributor to the Gold Coast economy. Export activity locally accounts for approximately $8.6 billion per year or 47% of the city’s total Gross Regional Product. The Gold Coast has a high concentration of small to medium size enterprises (often with limited capital for expansion) producing a range of competitive world class goods and services. In order to assist these firms to access international markets effectively and to grow their business in the city through securing export orders, it is proposed that a temporary program of financial assistance is implemented during the current economic downturn. This is intended to assist firms to continue the citywide push into export markets. Research has identified that in order to meet its employment and economic generation requirements by 2037, the Gold Coast must create at least 70,000 new export focused jobs in the city (comprising nearly 30% of the total job creation target for the city by 2037). In supporting the city’s export sector, Council has a significant commercially focused International Business Development Program centred around export development and export pathways across the 9 key industry sectors outlined in the Economic Development Strategy. In addition, Council works closely with the Australian Trade Commission (Austrade) in delivering the regional Tradestart program, to assist new exporters into international markets.



ATTACHMENT 2 The Direct Industry Assistance is designed to:

• Assist new and irregular exporters to commence exporting;

• Support businesses operating across Council’s nine key industry sectors and Pacific Innovation Corridor program, as identified in the Economic Development Strategy and supported in Council’s International Business Development Program. However, If in the opinion of Council the export activity will provide a positive and economically viable outcome to the Gold Coast region, then assistance may be considered outside of these guidelines.

• Assist recently successful new and irregular exporters to become sustainable exporters and increase export sales;

• Assist established exporters to increase export sales and to enter new markets; and

• Work co-operatively with Austrade/Trade Queensland to deliver export services to Gold Coast companies. At the discretion of the export coach, the export support may be utilised to coach and mentor potential exporters to become export ready. This support may be in the form of assisting with the design of marketing and communications materials that will be better received in the targeted export destinations. Anecdotal evidence suggests that some potential exporters point of sale material could be improved to better meet the expectations of an international audience. This assistance could be provided through an arrangement with a Gold Coast marketing agency, which would further stimulate the local economy. Tim Harcourt, Austrade’s Chief Economist has stated that the Global Financial Crisis (CFC) is taking its toll on trade. According to new Austrade/Sensis research, exporter confidence levels have slipped below those of non-exporting Australian small and medium sized enterprises (SME’s) for the first time in nearly five years. It is important that the focus for SME’s remains in export markets and to stay in the game even when things get tough. Building a successful export relationship can take years of development. Many Gold Coast SME’s have already undertaken a great deal of work in export markets to date, and Council has undertaken many trade missions over the past ten years that have assisted companies to enter export markets and delivered increased economic activity for the city. Therefore it is critical that these exporters continue to develop and foster the relationships already established in export markets and that they see going global as a long term game and as a core part of their business.



ATTACHMENT 2 Economic Impact/Outcome

Based on new exporter growth and sales in the city it is expected that the economic impact of this funding will result in new export dollars of $30 million being generated for the city along with the creation of 300 new full time jobs.


The total cost for the temporary financial assistance package to new exporters will be $150,000 over two years and will be used to assist individual companies that meet the New Exporter Development Program criteria as set out by Austrade. It is proposed that each company will be offered the sum of $3000 dollars to assist them in the facilitation of export between Australia and an international market from Australia.

It is also proposed that a criteria be set up by Council’s Economic Development Branch that will be used to measure each companies qualification for financial assistance to assist in export development.

The criteria to be adopted to measure companies qualification for financial assistance from Council’s Export Assistance Program (EAP) is based on the Federal Governments Export Market Development Grant Scheme (EMDG). This criteria may include but limited to the following:

• Must be companies registered and working with Gold Coast City Council through its TradeStart partnership program with the Commonwealth Government (Austrade);

• A good made in Australia; • A good made outside Australia where Australia will derive a significant benefit from its sale overseas; • A service provided outside Australia except services(including legal services) relating to migration, real estate, family

law and some services provided in Australia; • You must own the product, service, IP you are promoting; • An intellectual property right that mainly resulted from work done in Australia; • A trademark that was owned, assigned or first used in Australia; • Companies graduated from EMDG looking at new export markets; • Know how that mainly resulted from work done in Australia; and • Registered in Australia (ABN) and a Gold Coast City based company.



ATTACHMENT 2 Project Name Major Roads Project


Project Objective To put in place a range of road construction and upgrade projects for the City

Project Description • Ormeau Service Road Project - Two lane urban road construction between Peachey Rd and Pascoe Rd , Yatala. Road will function as western service rd to the M1

• Scottsdale Drive Project - 4 lane upgrade of a section of Scottsdale Dve between Corommandel Dve and the Varsity / Robina boundary. Works tied to the road upgrade being undertaken by the TOD development at Varsity Station .

• Papas Way Stage 1 - 2 lane urban upgrade and extension from Bunnings to Cayuga St • Pearson Road Stage 1 - Industrial Collector upgrade from Darlington Dve to Computer Dve to cater for increased

industrial development in the Yatala area.


This project is estimated to have a total economic impact to the city of $12.1 million. The project will also create 110 full time equivalent jobs.


$12,350,000. The works will be completed within 2009/10.



ATTACHMENT 2

Project Name Stormwater Drainage Infrastructure Seagull Avenue Catchment - Karbunya Stage 2

Investment Benefit Bring Forward of Drainage Infrastructure Project

Project Objective Improving Drainage Capacity. Reducing economic and social impact of flooding. Increasing confidence in Gold Coast property values. Increase capacity of the city to cope with climate change

Project Description Rainfall events in 2004 and 2005 resulted in a significant number of houses being flooded. This project will connect existing GCCC stormwater drainage projects west of the Gold Coast Highway through to the Gold Coast Highway crossing to improve drainage capacity


This project is estimated to have a total economic impact from the stimulus funding to the city of $1.5 million and will also create about 15-20 full time equivalent jobs during the construction phase.


$1,500,000. The works will be completed during 2009/10.



ATTACHMENT 2

Project Name Additional Stormwater Drainage Infrastructure Lanham Street Coolangatta, and Broadbeach Boulevard Broadbeach

Investment Benefit Bring Forward of Drainage Infrastructure Project

Project Objective Improving Drainage Capacity. Reducing economic and social impact of flooding. Increasing confidence in Gold Coast property values. Increase capacity of the city to cope with climate change

Project Description Lanham Street Coolangatta Stormwater Drainage Upgrade (W914) - $450,000 Localised flooding regularly affects residential property near Goodwin Park and Lanham Street Coolangatta. These drainage works will reduce the severity and frequency of flood waters entering properties. The works will include augmentation of the drainage systems and the installation of Tideflex valves at the beach to assist with mitigating the impact of sand build up on flood conveyance. A video monitoring system will also be trialled to increase the quality of maintenance services teams to prepare and respond to drainage disaster events. Broadbeach Boulevard (W914) $2,300,000 There is flooding into streets and properties along Broadbeach Boulevard on a frequent basis (Q1 storms). The proposed works will decrease the likelihood of flooding of the urban precinct area to a Q20 standard. It is proposed that the works be completed in 3 stages as follows:

• Stage One: Jubilee Ave July to August 2009 $600,000 • Stage Two: Queensland Ave an Surf Parade August to October 2009 $1,100,000 • Stage Three: Federation Avenue and Old Burleigh Road March to April 2010 $600,000


This project is estimated to have a total economic impact from the stimulus funding to the city of $2.7 million and will also create about 20-25 full time equivalent jobs during the construction phase.


$2,750,000. The works will be completed during 2009/10.



ATTACHMENT 2

Project Name Selected Bikeway Projects


Project Objective Construction of Bikeway Projects

Project Description • Robina Parkway off road Boowaggan Rd to Gooding Dr - Off road shared path stage 2 Boowaggan Rd to Gooding Dr including roundabout circulating path.

• Mirambina Dve Pimpama Bikeway - Off road shared path stage 2 Boowaggan Rd to Gooding Dr including roundabout circulating path.

• Off road shared path stage 2 Boowaggan Rd to Gooding Dr including roundabout circulating path - Off road shared path stage 2 Boowaggan Rd to Gooding Dr including roundabout circulating path.

• Worongary Rd - Gilston SS to Hinde Rd - Off road shared path stage 2 Boowaggan Rd to Gooding Dr including roundabout circulating path.

• Thomas Dve Chevron Is, Stanhill to Stanhill Off road - Off road shared path stage 2 Boowaggan Rd to Gooding Dr including roundabout circulating path.

• Smith St to Owen Park off road to S'Port SS - Off road shared path stage 2 Boowaggan Rd to Gooding Dr including roundabout circulating path.

• Cheltenham Drive and Ron Penhaligon path replacement - Off road shared path stage 2 Boowaggan Rd to Gooding Dr including roundabout circulating path.


This project is estimated to have a total economic impact to the city of $4.5 million. The project will also create 40 full time equivalent jobs.


$4,560,000. The works will be completed within 09/10.



ATTACHMENT 2

Project Name Carrara Stadium

Investment Benefit $20 million Council investment is hoped to leverage another $110 million from other funding partners including AFL, State and Federal Governments required to deliver a $130+ million of City building social infrastructure.

Project Objective To deliver a new national standard sports stadium suitable for a new Gold Coast AFL team and other major sporting and entertainment events.

Project Description Construction at Carrara of a modern, multi-purpose stadium for 25,000 spectators that can be expanded to host major international events. A home for the 17th team inn the AFL competition, the Gold Coast Football Club.


• 813 construction jobs, 490 flow on jobs over ten years

• 167 direct jobs through AFL team, 896 jobs over ten years

• 428 sports tourism jobs

TOTAL JOBS = 2,794 jobs over ten years

• Construction $130 million + $110 million flow on over ten years

• AFL Team - $75 million per annum, $127 million flow on over ten years

• Sports Tourism $34 million per annum over ten years, 121,000 visitor nights per annum

• Additional impact from other major sport and entertainment

TOTAL $ IMPACT = $1.45 billion over ten years


GCCC - $20 million AFL - $10 million State Government - $60 million (subject to election outcome) Federal Government - $40 million (awaiting confirmation) Cash Flow – 08/09 - $3 million, 09/10 - $21 million and 10/11 - $106 million



ATTACHMENT 2

Project Name Accommodation Project

Investment Benefit The project will provide Council with long term operational cost savings by delivering a highly efficient environmentally sustainably designed (ESD) workplace. These savings are associated with a significant reduction in decentralised staff travel costs, a reduction in comparable office operating costs, shared service efficiencies, wrap up of leases, and increased productivity associated with improved staff retention and communication. There are also long term capital savings associated with repositioning the administration to a location with excellent public transport services.

Project Objective To identify Council’s long term office workplace requirements and provide a sustainable long term strategy that meets Council’s business needs and provides value for money for the community.

Project Description The project is to provide a staged ESD workplace. The intention is to secure a suitable parcel/s of land that can accommodate Council’s office based workforce for the next 40 years. Stage 1 is expected to be in the order of 52,000 m2 Gross Floor Area providing for expected growth to 2025. The first stage build may be shared between two sites with the scale of build pending the Evandale master plan process recommendations. This first stage will provide growth flexibility for the organisation. Subsequent stages would be in the order of 10,000 m2 – 15,000m2 each with an additional two stages expected to meet Council’s needs. The actual size of these subsequent stages will depend on the growth rates experienced by future Councils and any future investment opportunities such as permanent leasing. Land is a relatively small cost of the expected project budget however is of very high strategic value. It is important to acquire a suitable parcel of land that will afford Council long term staged office flexibility and investment return.


• 855 construction jobs • 1,562 indirect jobs TOTAL JOBS = 2,417 over construction period • $90 million direct economic benefit • $183 million indirect economic benefit TOTAL $ IMPACT = $273 million


Stage 1 is expected to cost in the order of $280 million. This includes site acquisition for subsequent stages.



ATTACHMENT 3



ATTACHMENT 4



ATTACHMENT 5 Options for Deferral of Infrastructure Charges

Impact for Developer

Recovery Option Impact for Council Comments

Negotiate a payment arrangement to assist cash flow

Treat the charge as a Rate and then take up Rates payment options

Significant manual administrative process with extra resources required to manage possible volumes.

Can only be done for Infrastructure Charges under PIP (i.e. not Infrastructure Policies) Security over land is void if property is reconfigured, so this method is only practical for MCU or BA approvals. (ROL would have no security after plan sealing as the charge is levied on the parent lot).

Negotiate a payment arrangement to assist cash flow & provide bank guarantee

Create an Accounts Receivable charge and manage it through Council’s various debt collection processes.

Significant administrative process to manage security and debt.

Security would be needed – consider bank guarantees for all outstanding infrastructure charges and conditions.5

Standard deferral of charges to sale date for ROL only

Later milestone for ROL (e.g. due on sale)

See above for ways to manage. Security would be required, and a new process to recognise that a lot had been sold.

5 Bank guarantees require the developer to have sufficient security to support the guarantee. There is usually a set up fee and a 1.5% fee per year to maintain a bank guarantee. If the guarantee was secured over land which was to be reconfigured as part of the development, consideration would need to be given to the management of this, as these bank guarantees may become invalid when the property changes description and the land is on sold.



ATTACHMENT 6 Special rates are levied for the provision of a service, facility or activity and are levied in addition to the general rate, differential general rates or in combination with other rates. Special rates are levied on specifically identified rateable land that benefits from the service, facility or activity. Currently, there are a number of special rates levied in areas that would be subject to a potential special rate to service the loan funding for the prioritized projects. Examples include the Surfers Paradise Alliance and the Safety Camera Network special rates levied on tourist rental and commercial properties within the Surfers Paradise precinct. Levying a special rate for the servicing of the loan funding debt created to fund the prioritized projects will mean an additional separate rate to those already levied. There are two ways in which the special rate could be levied on the land situated in locations where there are immediate benefits from the implementation of the prioritised projects:

a) On all rateable properties b) On tourist rental and commercial properties

(i) Levy a separate charge Separate charges are levied equally on all rateable land across the City to fund a particular service, facility or activity where it will benefit the community generally and it is not possible to say that one or more specific parts of the City receive the sole benefit of the service, facility or activity. Separate rates are levied in addition to the general rate or differential general rate. There are 230,564 rateable properties across the Gold Coast. If a separate charge was levied on all of these properties (including residential, tourist rentals and commercial properties), ratepayers would be subject to a levy.

(ii) Introduce a separate differential general rate category It is possible for Council to introduce differential general rate categories because of additional costs to supply services, or a higher level of service to a particular community or part of a Council area. It may be possible to introduce a differential general rate category for properties within the areas immediately affected by the construction of new works and surrounding suburbs, since it is these suburbs that enjoy the proximity to new works. Within Council’s differential general rating scheme there are currently 80 categories of differential rates based on property use and type. To introduce additional differential general rate categories for suburbs located within or adjacent to the new construction works, the sum of the current differential general rate categories would increase exponentially. It has been advised by Organisational Services directorate that the administration involved in delivering this option would be extremely intensive in both its set up and ongoing operation. Because of this, no further investigation has been pursued and this option is not considered viable.



ATTACHMENT 6 (iii) Funding from existing differential general rate Loan funding repayments could be funded through the existing differential general rate applied to all the rateable properties across the City. For every 1% increase in the differential general rate, approximately $2.7M in rate revenue is raised. Note that the differential general rate would need to be increased by these percentages for every year of the loan term (15 years). A Special Rate can only be levied on identifiable properties where the rate payer will specially benefit from, or have special access to the facility. Applying such a rate may raise some legal risks in that it could be argued that since the prioritised projects attracts an economic benefit across the entire city, the application of a special rate only on those suburbs immediately benefiting from the works would not be justified. The application of a separate charge which must be levied on all rateable properties across the city may attract some resistance from rate payers who do not consider that the prioritized projects is beneficial for them. If a separate differential rate category was implemented, the administrative overheads and ability to manage the significant increase in the number of rating categories would be extremely intensive and therefore unjustified. Council levies a differential general rate across the city. A differential general rate is different to a general rate in that all rateable properties across the city are categorised (for example, residential and commercial properties). The revenue from differential general rates are used to provide the necessary infrastructure and utilities needed to service the city and maintain the Gold Coast as a destination of choice for visitors and residents. Given this, it is recommended that the general differential rate is the preferred method of raising the funding required to service the debt to fund the upgrade the Surfers Paradise foreshore. (iv) Developer Contributions Developer contributions could still be conditioned if there are development approvals that arise. It may be possible for Council to use these contributions to either pay for a portion of the project works, or to offset loan repayments for that year. If loan funding were used as the option to fund the immediate implementation of the projects, and developer contributions were received, the developer contributions could be used to offset the loan repayments, and eliminate or reduce the amount of revenue needed to be raised via other alternatives (such as a differential general rate) for that year. Where contributions are provided years after project works are completed, a pro rata system could be implemented whereby a portion of the contribution could be used to service the loan and the remaining contribution could be put in trust for ongoing maintenance or future works.



ATTACHMENT 6 (v) Use of funds derived from Priority Infrastructure Plan (PIP) The use of PIP funds as applicable could be allocated to the implementation of some projects based on payments received from developers. Of these funds, the 10 Year Capital Works Program has a total funding allocation planned to be spent between 2015 and 2018. A conservative plan for the Capital Works Program has been developed because there is a disparity between actual and expected incoming PIP contributions due to the current economic downturn and the uncertainty of private development projects in the future. The allocation of PIP funds is an estimate only, and although planned in future capital works programs, can not be definitively relied upon since the funds are predicted to be received rather than in existence. Where a special rate or separate charge were introduced for the raising of funds for the implementation of some identified projects, collection of the PIP funds from private developers would mean that some private developers could be contributing twice. Aside from the legal risks, this is another reason why the introduction of a special rate or separate charge should not be introduced for the purpose of revenue raising. (vi) Unallocated Developer Contributions An investigation into unallocated developer contributions has been undertaken and although there appears to be some contributions currently held in trust for the provision of streetscaping, lighting, bikeways and parks within the Surfers Paradise area, all of the contributions are constrained to be spent in areas other than the Surfers Paradise foreshore.


CLOSED SESSION SECTION 463 LOCAL GOVERNMENT ACT 1993 PROCEDURAL MOTION moved Cr Young seconded Cr Clarke That the Committee move into Closed Session pursuant to Section 463 of the Local Government Act 1993, for the consideration of the following Item for the reason shown:-

Item Subject Reason

2 Gold Coast Investment Fund Update Report Budgetary Matter

CARRIED

PROCEDURAL MOTION moved Cr Betts seconded Cr Young That the Committee move into Open Session.

CARRIED


ITEM 2 ECONOMIC DEVELOPMENT BRANCH GOLD COAST INVESTMENT FUND UPDATE REPORT PD330/292/08(P1) REPORT CONFIDENTIAL COMMITTEE RECOMMENDATION ED09.0331.002 moved Cr Young seconded Cr Betts 1 That the report/attachment be deemed non-confidential with the exception of

those parts deemed by the Chief Executive Officer to remain confidential. 2 That Gold Coast Investment Fund (GCIF) monies be allocated towards the Water

Distribution Reform funding investment option in the amount of $280.9 million and that this be reflected in the March Budget Review.

3 That Council note that should there be future alternative investment

opportunities deemed superior to the GCW debt funding, then subject to Council approval, the loans may be drawn down to unwind the GCW debt investment.

4 That the CEO (Director EDMP) bring a further update report back to Council in

June 2009 outlining the actions taken to formally implement the Gold Coast Investment Fund (GCIF) initiative.

CARRIED


ITEM 3 CITY GOVERNANCE 2008-09 LOAN BORROWING APPLICATION FN334/375/11(P1) 1 BASIS FOR CONFIDENTIALITY Not applicable. 2 EXECUTIVE SUMMARY Not applicable. 3 PURPOSE OF REPORT The purpose of this report is to present Council with a version of the financial sustainability model that is proposed to support the 2008-09 debt application to the Department of Local Government. 4 PREVIOUS RESOLUTIONS Not applicable. 5 DISCUSSION 5.1 Background All numbers used in this report are in nominal (future) dollars. The modeling results are based on the model presented to the Councilor Strategic Planning Workshop on 4 December 2008, with adjustments made for major recent inclusions in the March budget review and the draft 2009-10 budget. Once the draft 2009-10 budget is final, the model will be revised using 2009-10 as the first year. Council will need to consider loan borrowings to fund the economic stimulus package and raise additional revenue to fund the associated debt service costs and operating costs of the new facilities and services. 5.2 Debt Application Process The Statutory Bodies Financial Arrangements Act 1982 gives authority for Councils to borrow money after receiving approval from the Treasurer. To receive this approval, Gold Coast City Council (GCCC) is required to submit an application to the Department of Local Government Sport and Recreation (DLGSR) seeking approval to draw down loans from QTC that have been included in the current year’s budget. DLGSR requires GCCC to submit a 10 year cash flow model demonstrating that the planned borrowings are financially sustainable. The 10 year cash flow model must be signed by the Mayor and CEO, certifying that the loans will be used for lawful capital purposes and that the cash flow model presents the realistic intention of Council. Due to the current economic environment, it is proposed that this debt application include Council’s borrowing requirements for 2008-09 and 2009-10 (inclusive of the stimulus package).


ITEM 3 (CONTINUED) 2008-09 LOAN BORROWING APPLICATION FN334/375/11(P1) Receiving approval to borrow now for the two financial years does not necessarily mean that Council will draw down the loans, but it provides Council with the flexibility to take advantage of the lower interest rate environment and one-off borrowing opportunities that may arise. Any decision in this regard would be based on the long term benefit to Council. It should also be noted that the borrowing approval lapses at 30 June 2009 and a fresh application would need to be submitted early in the new financial year. 5.3 Financial Sustainability Model – 4 December 2008 On 4 December 2008, a version of the long term financial sustainability model was presented to Council at a strategic planning workshop. The cash position of the model resulted in shortfalls in the first four years of the model and surpluses in the final five years of the model (demonstrated below). No decisions were made at the workshop to reduce these shortfalls and the 2009-10 budget parameters were set according to this cash position with the understanding that the shortfall position would be addressed as part of the annual budget deliberations. Annual Cash Position- As Presented 4 December 2008

Forecast Annual Cash Surplus or Deficit

-60,000,000

-40,000,000

-20,000,000

-

20,000,000

40,000,000

60,000,000

2008/09 2009/10 2010/11 2011/12 2012/13 2013/14 2014/15 2015/16 2016/17 2017/18 2018/19

Financial Year

Cas

h Su

rplu

s or

Def

icit

5.4 Financial Sustainability Model – Balancing the Budget At the 4 December workshop, a commitment was made to Council that assumptions in the model would be adjusted to achieve a balanced cash position and the revised model would be presented to Council for approval, prior to submitting Council’s debt application. Historically, Council has adjusted the capital expenditure contained in the 10 year cash flow model to reflect a sustainable position. It is proposed that the capital be reduced in the 10 year cash flow model and funding be identified during the 2009-10 budget process to reinstate the capital in Council’s long term planning.


ITEM 3 (CONTINUED) 2008-09 LOAN BORROWING APPLICATION FN334/375/11(P1) To achieve a sustainable outlook, some high level adjustments have now been made to reduce capital expenditure in the first four years of the model to achieve a balanced position. These cuts have not been made to specific projects, or even to specific areas of Council. The quantum of annual cuts made in the model to achieve a balanced position is shown in the following table.

Financial Year

Reduction in Capital budget

2009-10 - 2010-11 $40m 2011-12 $23m 2012-13 $12m

The annual cash position after making these adjustments is shown in the following graph. It can be seen that a small surplus is achieved in the draft 2009-10 budget, followed by a balanced budget position for the next four years and surpluses beyond that (note that the surpluses are in future dollars, so the purchasing power of those surpluses is diminished from a current equivalent surplus). Annual Cash Position- Proposed Debt Application Model

Forecast Annual Cash Surplus or Deficit

-10,000,000

-

10,000,000

20,000,000

30,000,000

40,000,000

50,000,000

60,000,000

2008/09 2009/10 2010/11 2011/12 2012/13 2013/14 2014/15 2015/16 2016/17 2017/18 2018/19

Financial Year

Cas

h Su

rplu

s or

Def

icit

The graphs below show the projected capital works and loan requirements for 2008-09 and the following 10 years based on the assumption that Council intends to implement the balanced scenario model. The debt application also assumes that the GCW capital funding strategy does not go ahead. This assumption ensures that GCCC can draw down sufficient debt to cover the capital program if the strategy is not approved.


ITEM 3 (CONTINUED) 2008-09 LOAN BORROWING APPLICATION FN334/375/11(P1) Ten Year Capital Program- Proposed Debt Application Model Projected Loan Requirements- Proposed Debt Application Model

Forecast Capital Works

-

100,000,000

200,000,000

300,000,000

400,000,000

500,000,000

600,000,000

700,000,000

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Financial Year

$

GCCC GCW

Projected Loan Requirements

-50,000,000

100,000,000150,000,000200,000,000250,000,000300,000,000350,000,000400,000,000450,000,000

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Financial Year

Loan

Req

uire

men

t

GCCC GCW


ITEM 3 (CONTINUED) 2008-09 LOAN BORROWING APPLICATION FN334/375/11(P1) Projected Loan Balance- Proposed Debt Application Model

Projected Loan Balance

0

200,000,000

400,000,000

600,000,000

800,000,000

1,000,000,000

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

Financial Year

Loan

Lia

bilit

y

Note: This loan balance graph assumes that any GCW loans drawn down in 2008-09 and 2009-10 are transferred to the Distribution entity with the assets at 1 July 2010. The analysis on the financial model above includes the stimulus package that is currently being considered by Council. Loan funding of $55m is included in the debt application to fund this package of projects. A detailed list of assumptions for the financial model is attached as well as the 10 year cash flow forecast that will need to be submitted to the DLGSR with the loan application.

The debt application for 2008-09 will be for $250.9m against a capital works program of $495.2m. The program is therefore

51% debt funded.


ITEM 3 (CONTINUED) 2008-09 LOAN BORROWING APPLICATION FN334/375/11(P1) 5.5 Borrowing in Advance for 2009-10 Due to the current economic environment, a small window of opportunity exists for Council to take advantage of the favourable climate for borrowing funds. Borrowing rates are at historical lows, but this is not expected to last for long, even though the current economic climate is not likely to improve quickly. In November 2008 the Coordinator Financial Planning and Treasury advised Council of the small window of opportunity to borrow at historical low rates with the likelihood that long term rates would soon rise. In recent weeks this has begun to happen. The following graph demonstrates this recent increase in longer term rates even though short term rates have remained low.

We expect that short term rates will remain low for a period of time. There is however, considerable upwards pressure on longer term rates given that governments around the world need to issue bonds to raise money to fund their large deficits associated with the announced stimulus packages, reduced tax revenue and higher welfare payments. The Federal government recently announced that it will cease purchasing State issued bonds as they need all funds raised to fund their own deficit. This increases competition for all organisations that are in the market to raise funds over the longer term, including GCCC. Rates are likely to rise as a result. It is therefore proposed that GCCC seek approval from the Department of Local Government to draw down loans for 2008-09 and 2009-10 (inclusive of the stimulus package). This will enable Council to take advantage of any opportunities that may arise as a result of the current interest rate environment.


ITEM 3 (CONTINUED) 2008-09 LOAN BORROWING APPLICATION FN334/375/11(P1) The possible financial gain of doing this could be significant, depending on the movement in interest rates over the next 12 months. The following table shows the approximate savings based on a variety of interest rate assumptions, if $398m in loans is drawn in advance at 5.75% on a 15 year term: Borrowing Rate- June 2010

6.00% 6.25% 6.50% 6.75% 7.00%

15 Year Savings if Loans are Drawn in Advance at 5.75%

$9.7m $19.5m $29.3m $39.3m $49.3m

For completeness, losses are shown below if long term interest rates fall in the period. Borrowing Rate- June 2010

5.50% 5.25% 5.00% 4.75% 4.50%

15 Year Loss if Loans are Drawn in Advance at 5.75%

($9.6m) ($19.1m) ($28.6m) ($38.0m) ($47.2m)

If this action is approved by Council, approval will be sought to draw down the 2009-10 loans as interest only for 12 months. These funds will be invested by GCCC Treasury for this period to partially offset the interest cost. There is currently a differential of about 1% between the borrowing rate and the investment rate (the borrowing rate being higher), which will result in an interest cost of approximately $4m in 2009-10 that will need to be included in the budget. Further, while current inflation levels are low, the IMF outlook is for inflation to rise from late 2009 and through 2010. If inflation does rise, the real cost of funds that we draw down now will reduce even further, making this proposal even more attractive. (i.e.- If the borrowing rate is 5% and inflation is 1%, the real cost of funds is 4%. If inflation increases to 3%, then the real cost of funds reduces to 2%). Executives at the Queensland Treasury Corporation have been consulted on this approach and largely agree with the financial outlook presented by GCCC’s Treasury section. However, while they believe that long term rates will rise, they don’t think there will be a large increase by June 2010. Despite this, they supported our approach to apply to the DLGSR for next year’s loans now, so that Council has the option of drawing on the loans early. They advised that if approval is granted, a decision to draw the loans can then be made in consultation with QTC based on the market conditions and one-off opportunities that may arise over the coming months. If approval is granted, this gives Council the opportunity to draw the loans up to 30 June 2009. If we don’t draw on them by then, Council will need to submit a new application to the Department. It is impossible to predict prevailing interest rates 12-15 months into the future, especially in the uncertain times that currently exist. Interest rates could actually fall which will result in a higher cost to Council if loans are drawn down in advance. These predictions are based on the advice of experienced financial market operators who are interpreting the financial indicators that currently exist, but Council must be comfortable with the decision made.


ITEM 3 (CONTINUED) 2008-09 LOAN BORROWING APPLICATION FN334/375/11(P1)

5.6 Purpose of Loan Borrowings The following table outlines the purpose for which the loans are being borrowed. Loan Purpose Forecast Loan Draw Down 2008-09 2009-10 Accommodation 943,000 Art Centre 550,000 Botanical Gardens Headworks 1,055,000 2,182,000 Centre Improvement Program 2,592,624 City Transport Plan 21,500,000 76,913,000 Flood & Drainage 10,300,000 3,000,000 General Loans 25,000,000 25,000,000 Stimulus Package 55,825,000 ERP 12,328,453 Retail Entity Establishment 16,200,000 Hope Island 59,400 5,379,713 Major Sporting Areas 3,588,301 2,025,250 Open Space Preservation 7,000,000 5,000,000 Parkland Acquisitions Levy 20,000,000 8,480,000 Parklands Acquisitions Headworks 1,500,000 7,500,000 Parks & Rec Headworks 17,876,949 8,623,894 Equipment 169,800 272,300 Quarry Services - 500,000 Scientific Services 2,000,000 2,000,000 Tourist Parks 9,976,000 6,387,125 Waste Management 10,000,000 41,088,800 Water & Wastewater 119,406,304 116,879,880 250,924,754 398,178,039 Notes: Water loans are subject to change depending upon whether Council approves the capital funding strategy for GCW. Any loans drawn down for GCW are assumed to transfer with the assets to the Distribution entity on 1 July 2010. 6 STATUTORY MATTERS Not applicable. 7 CORPORATE/OPERATIONAL PLAN Not applicable.

If Council approves the strategy of drawing down loans in

advance for 2009-10, then the debt application to DLGSR will be for $250.9m for 2008-09 loans plus an additional $398.2m

for 2009-10, for a total of $649.1m.


ITEM 3 (CONTINUED) 2008-09 LOAN BORROWING APPLICATION FN334/375/11(P1) 8 COUNCIL POLICIES Council’s borrowing policy adopted as part of the 2008-09 budget would need to be revised if the 2009-10 loans are drawn in advance of the financial year. 9 DELEGATIONS Not applicable. 10 BUDGET/FUNDING If 2009-10 loans are drawn down in advance, $4m will need to be added to the 2009-10 budget to fund the interest cost of the funds. 11 COORDINATION & CONSULTATION Not applicable. 12 TIMING Not applicable. 13 STAKEHOLDER IMPACTS Not applicable. 14 CONCLUSION Council is in its fifth year of delivering an expanded major infrastructure program. Capital expenditure has increased from $201m in 2003-04 to $539m in 2008-09 and approximately $520m in 2009-10. In addition to an already sizeable capital expenditure program, Council is also considering an Economic Stimulus Package amounting to $122.15m to provide a further stimulus to the Gold Coast economy. Inherent with any capital expenditure program is the responsibility to fund the associated operating and maintenance costs of the new assets created e.g. new or expanded libraries and community centres. In order to fund the increased capital program and additional operating costs, it will be necessary to raise additional loan borrowings and identify additional revenue funding sources. The application to the Department of Local Government will seek approval for loan borrowings of $649.1 for 2008-09 and 2009-10, and the draft 2009-10 budget will contain a proposal to reduce the rates discount in order to fund the additional debt service costs and ongoing operating costs. Without such a funding source, the delivery of the stimulus package would not be possible without significant reductions to services or other capital works allocations. Approval to borrow for the two years allows Council flexibility to take advantage of any opportunities that may arise in the current low interest rate environment.


ITEM 3 (CONTINUED) 2008-09 LOAN BORROWING APPLICATION FN334/375/11(P1) If the advance loans are approved by DLGSR, the financial markets will be monitored over the coming months and, in consultation with QTC, a final administrative decision (via existing delegations) will be made as to whether the loans should actually be drawn upon in advance. In support of the loan borrowing application to the Department of Local Government, a sustainable 10 year cash flow has been developed. While developing the 10 year cash flow it was identified that in consideration of the 2009-10 budget, Council will need to either reduce the general revenue funded capital program in future years or identify alternative funding opportunities. 15 RECOMMENDATION It is recommended that Council resolves as follows: 1 To adopt the revised ten year cash flow and statement of forecasting assumptions for

submission to the Department of Local Government in support of the debt application for $649.1m, being loans required for 2008-09 and advanced loan borrowings for 2009-10, noting that approval will lapse at 30 June 2009.

2 It be noted that advanced loan borrowings will only be drawn after a full analysis is completed and consultation is held with Queensland Treasury Corporation on interest rate movements.

3 Any decision pursuant to recommendation 2 is to be reported back to the next available meeting of the Corporate Governance & Finance Committee.

Author: Authorised by: Jordan Reeves Joe McCabe Executive Coordinator Financial Strategy & Development

Director City Governance

2 March 2009 Changed Recommendation COMMITTEE RECOMMENDATION ED09.0331.003 moved Cr Young seconded Cr Grummitt 1 To adopt the revised ten year cash flow and statement of forecasting

assumptions for submission to the Department of Local Government in support of the debt application for $664.1m, being loans required for 2008-09 and advanced loan borrowings for 2009-10, noting that approval will lapse at 30 June 2009.

2 It be noted that advanced loan borrowings will only be drawn after a full analysis is completed and consultation is held with Queensland Treasury Corporation on interest rate movements.

CARRIED


ITEM 4 MAJOR PROJECTS SURFERS PARADISE TRANSIT CENTRE SITE REDEVELOPMENT ENQUIRY BY DESIGN WORKSHOP OUTCOMES PN240206/46/02(P3) Refer 6 page attachment 1 BASIS FOR CONFIDENTIALITY Not applicable 2 EXECUTIVE SUMMARY Not applicable 3 PURPOSE OF REPORT This report is to advise Council on the outcomes of the Enquiry By Design Workshop held on 12 September 2008 for the redevelopment of the Surfers Paradise Transit Centre site. 4 PREVIOUS RESOLUTIONS Council at its meeting of 19 May 2008 resolved in part G08.0519.007: "2 That Council notes the results from the Expression of Interest process and the

alternative development proposals.

3 That Council proceed with the development of a tender specification in conjunction with the development industry that includes the following elements:

a Inclusion of adjoining lands

b Connections both visual and physical to important city elements and nodes eg: parks, river & existing streets.

c The provision of a high quality Transit Centre, all current carparks & parkland in freehold ownership to Council

d Financial return to Council.

4 Should there be a reasonable prospect through the tender process of achieving Council’s objectives in 3 above, then Council proceed to tender.

5 Should Council determine that it’s objectives would not be met by the tender process then the CEO commence a master planning process for the site which incorporates the following elements:

a An urban design study that shows the potential links that are possible as an ultimate goal, including visual and physical links.

b An economic study to provide Council with advice on real estate cycles with the view to anticipate an optimum time to move forward with the total redevelopment of the entire city block that the Transit Centre sits on.

c A land use study, based on the time frame that will be identified in the economic study that proposes the best and highest use of the whole city block, including community and commercial use."


ITEM 4 (CONTINUED) SURFERS PARADISE TRANSIT CENTRE SITE REDEVELOPMENT ENQUIRY BY DESIGN WORKSHOP OUTCOMES PN240206/46/02(P3) Council at its meeting of 12 December 2008 resolved G08.1212. 021: “1 That Community Services progresses maintenance works this financial year to address

any operational requirements of the Transit Centre and Bruce Bishop Car Park.

2 That Community Services undertake an audit to determine scope of refurbishment works required to the Transit Centre and Bruce Bishop Car Park and the capex costs for these works be referred to the next budget process.’

5 DISCUSSION 5.1 Enquiry By Design Workshop As a result of the above resolution, it was proposed to conduct two Enquiry-by-Design Workshops. The first workshop, involving Council staff and councillors only, resulted in design ideas for the Surfers Paradise Transit Centre Site and adjoining land. Following this workshop it was proposed to invite representatives of the development industry, as well as the internal stakeholders, to a one day workshop where a proposed design was to be discussed with a view to agreement on a set of design principles for inclusion in a tender document. The first EbD workshop was held on 12 September 2008. Council engaged Deicke Richards and Malcolm Middleton Architects to run the workshop process, with the aim of: • Exploring options for the development of the Surfers Paradise Transit Centre Site and

adjoining land

• Identifying objectives and opportunities for the site and the broader context area

• Identifying visual and physical connections – to the site, the river, Cavill Avenue, the beach, Q1, Circle on Cavill, Remembrance Drive and destinations outside the context area

• Considering the placement of land uses within the context area and possible redevelopment opportunities

The actual workshop process was held over three days (12,15 and 17 September 2008). • Day 1 was attended by Councillors, Council internal stakeholders and the Design

Team. The morning involved a briefing session highlighting the key issues relating to transport/economics/flooding/community/planning context/urban design analysis and was followed by two design sessions

• Day 2 involved the design team working alone to finalise the designs from Day 1

• Day 3 involved a follow-up meeting with participants to present and discuss the final designs


ITEM 4 (CONTINUED) SURFERS PARADISE TRANSIT CENTRE SITE REDEVELOPMENT ENQUIRY BY DESIGN WORKSHOP OUTCOMES PN240206/46/02(P3) Following the presentation of the final designs, the consultant prepared a draft Workshop Outcomes Report. In that report the consultant has suggested a number of ‘next steps’ for this project, as follows: • Determination of an agreed preliminary structure plan and process for ongoing

assessment

• Testing of the structure plan with a second workshop taking into account inputs from previous EOI participants, other stakeholders and agencies

• Preparation of a responsive master plan that can be carried forward for individual site development initiatives and managed as an overall coordinated project. This testing will include more detailed traffic, flood proofing and site parcelisation strategies

• Preparation of a strategic development plan for commercial options testing and the delivery of a functional public realm over the short and long term

• Review the South Bank model for control and commercial testing options

• Determination of a methodology that will encourage site amalgamations with site implementation benefits

• Determination of a staging and ownership model plus a project management, peer review, implementation and control strategy

• Engagement with development community and adjoining landholders

• Publication of the vision

• Call for particular site EOIs to the agreed master plan approach

• Monitor and measure outcomes The five design concepts and summary strategic concept are at Attachment A. 5.2 Next Steps A meeting was held on 17 October 2008 between Council officers who attended the design workshop, to discuss the draft Workshop Outcomes report. The meeting attendees agreed the next step should not be a second workshop involving the development industry. It was believed such a workshop would be premature for the following reasons: • the first workshop did not result in suitably informed or high quality plan(s) that could be

used in a second workshop;

• the strategic urban design concept framework summarising the five options, while highlighting the main links between the core and context area, did not offer much alternative to the existing development and structure on site

• the meeting attendees felt that it was extremely difficult to produce plans on the future use of the Transit Centre site without an agreed vision or Masterplan for Surfers Paradise to guide what is needed in this part of the City


ITEM 4 (CONTINUED) SURFERS PARADISE TRANSIT CENTRE SITE REDEVELOPMENT ENQUIRY BY DESIGN WORKSHOP OUTCOMES PN240206/46/02(P3) • the Transit Centre site was seen as one of the prime sites in Surfers Paradise and care

should be taken in committing this site to a particular use and layout without considering what the City needs as a whole, and how a key site currently owned by Council is best redeveloped

In this respect the meeting attendees saw this lack of agreed vision for Surfers Paradise as a major reason why it is difficult to agree on an appropriate design for the site. Council’s Planning Assessment Officer advised of two possible development options open to Council if it wished to pursue selling the site: • Council could seek to obtain an approval for the development of the site (assessed by

PET’s Implementation and Assessment Unit, City Architect and Urban Design Unit) and as a part of any contract of sale could require the new owner to develop in accordance with that approval – this would be subject to legal advice

• The contract of sale of the transit centre site could stipulate that any future application for a Development Permit is to comply with the provisions of an approved Preliminary Approval of the site (subject to legal advice). The Preliminary Approval could be written in such a way that it allows for flexibility in the final design such as building height and road designs, but strict on issues such as land uses and car parking

In light of the above discussion and Council’s resolutions of 19 May and 12 December 2008, it is recommended: • Council not proceed to a tender stage for the redevelopment of the transit centre site

and adjoining lands • Council not proceed with a master plan process for the site • That before any redevelopment of the Transit Centre, Council investigates undertaking

a master planning process for Surfers Paradise that would identify an agreed strategic vision encompassing social, economic and structural considerations. In the first instance, this investigation will include reporting to Council on the proposed scope, timing and cost of undertaking this master planning exercise

5.3 Transit Centre Refurbishment Given that the redevelopment of the Transit Centre is unlikely to proceed in the short to medium term (next 5 years), consideration should be given to a refurbishment program. It is anticipated that refurbishment will include the Bruce Bishop car park. Previous reports considered redevelopment options, where Council maintains full ownership, including an extensive makeover of the Transit Centre building, including sidewalk cafes and retail. The estimated cost of an extensive makeover is in the order of $3.6M. It is not recommended to proceed with such extensive works pending the outcomes of the proposed Surfers Paradise master plan. It is therefore recommended that Community Services undertake an audit to determine what refurbishment works are required for the Transit Centre and the Bruce Bishop car park and the cost for these works be included as a proposal in the next budget process. The Audit should give consideration to a tenancy plan and appropriate internal fit-out that maximises use of the Transit Centre.


ITEM 4 (CONTINUED) SURFERS PARADISE TRANSIT CENTRE SITE REDEVELOPMENT ENQUIRY BY DESIGN WORKSHOP OUTCOMES PN240206/46/02(P3) It terms of future tenancy and lease arrangements for the Transit Centre it was discussed in general business of the Council meeting held 16 March 2009 that Council considers a maximum lease period of five years with a two year extension option. Although it is unlikely that Council will redevelop the centre in the next five years it may be prudent of Council to include in the lease terms a termination clause should Council wish to proceed with a redevelopment of the site. This will ensure that future Council’s have the ability to realise commercial opportunities should they arise during the term of the leases. The impact of such an approach may be a reduction in commercial return from the lease due to the uncertainty of redevelopment timelines. 6 STATUTORY MATTERS Not applicable 7 CORPORATE/OPERATIONAL PLAN Strategic Priority 1 A Safe Community 1.1.3 A safer community through the design of the built environment Strategic Priority 2 Advocacy 2.1.5 Financial and non financial benefits are realised for the city. Strategic Priority 3 Community Capacity Building 3.2.1 Level of resident optimism about the future of the city. 3.2.4 Level of community belonging. Strategic Priority 5 Cultural Development 5.1.2 Cultural development is considered in planning the city’s future. 5.3.1 Facilitate the establishment of a network of cultural venues and hubs to host a range

of cultural Activities. 5.3.3 Develop active partnerships with both the private and public sector to ensure the

continuation of the city’s culturally rich lifestyle. Strategic Priority 8 City Transport Improvement 8.1.6 Effective integration of transport, land-use planning and growth management 8.3.6 Progressively implement the Whole of the City Parking Strategy which is aimed at

delivering improved city transport outcomes through guiding the provision, regulation of use and pricing of all Council controlled/operated parking facilities.

Strategic Priority 10 Diversify & Strengthen the Economy 10.1.5 Delivery of the necessary planning and infrastructure to ensure the continuing

development of sustainable tourism within the city.


ITEM 4 (CONTINUED) SURFERS PARADISE TRANSIT CENTRE SITE REDEVELOPMENT ENQUIRY BY DESIGN WORKSHOP OUTCOMES PN240206/46/02(P3) 10.3.2 Revitalise the commercial centres of the city through the provision of assistance in

developing business and marketing programs with the local business community and enhanced streetscaping (Centre Improvement Program).

Strategic Priority 11 City Image 11.1.3 Enhanced presentation of the city for residents and visitors 11.3.5 Develop and maintain the city’s open space network via the presentation of Parks

and Urban Streetscape Program and high maintenance programs for parks and gardens etc along the tourist strip

Strategic Priority 13 Land Use and Development Control 13.1.1 A robust framework for the management of new development to ensure integrated

land use, transport, environmental and social planning. 8 COUNCIL POLICIES Gold Coast City 2003 Planning Scheme Gold Coast City Transport Plan Gold Coast Council Corporate Plan Gold Coast City Strategic Plan Gold Coast Activity Centre Plan Gold Coast City Economic Development Strategy Gold Coast Whole of City Vehicle Parking Strategy Gold Coast Cultural Development Policy 9 DELEGATIONS Not applicable. 10 BUDGET/FUNDING Not applicable. 11 COORDINATION & CONSULTATION Relevant officers from Economic Development and Major Projects, Planning Environment and Transport, and Community Services have been working together on this issue. 12 TIMING Not applicable. 13 STAKEHOLDER IMPACTS Not applicable.


ITEM 4 (CONTINUED) SURFERS PARADISE TRANSIT CENTRE SITE REDEVELOPMENT ENQUIRY BY DESIGN WORKSHOP OUTCOMES PN240206/46/02(P3) 14 CONCLUSION It is concluded that the Transit Centre site redevelopment workshop process did not produce design options that were of a high enough standard or originality to justify a further workshop with the development industry. The lack of vision for the future development/redevelopment of Surfers Paradise and how this might impact on the redevelopment of the transit centre site is a major reason why it is difficult to agree on an appropriate design for the site. The transit centre site was seen as one of the prime sites in Surfers Paradise and care needs to be taken in respect of the possible uses to be proposed on site. To assist in this process there is a need for a strategic master plan for the development of Surfers Paradise as a whole, before any further design work is undertaken on the transit centre site. It is therefore recommended that the design process be concluded and no further design work be undertaken on this site until a master plan for Surfers Paradise is completed. This master planning process would identify an agreed strategic vision encompassing social, economic and structural considerations. In the first instance, this investigation will include reporting to Council on the proposed scope, timing and cost of undertaking this master planning exercise. It is also recommended that Community Services undertake an audit to determine what refurbishment works are required for the Transit Centre and the Bruce Bishop car park and the cost for these works be included as a proposal in the next budget process. The Audit should give consideration to a tenancy plan and appropriate internal fit-out that maximises use of the Transit Centre.


ITEM 4 (CONTINUED) SURFERS PARADISE TRANSIT CENTRE SITE REDEVELOPMENT ENQUIRY BY DESIGN WORKSHOP OUTCOMES PN240206/46/02(P3) 15 RECOMMENDATION It is recommended that Council resolves as follows: 1 That Council notes the outcomes of the enquiry by design workshop process.

2 That Council does not proceed with the development of a design option and tender specification in conjunction with the development industry.

3 That before any redevelopment of the Surfers Paradise Transit Centre progresses, the Director Planning Environment & Transport reports back to Council on the proposed scope, timing and cost of undertaking a master planning exercise for Surfers Paradise, with consideration given to a strategic vision encompassing social, economic and structural considerations.

4 That the Director Community Services submits a budget proposal to the 2009/10 budget process for the urgent maintenance and/or refurbishment of the existing complex.

5 That the Chief Executive Officer seek market competitive five year leases with an option for a two year extension for the existing and future lessees of the Transit Centre. The lease conditions is to include a termination clause should Council decide to redevelop the site before expiration of the lease.

Author: Authorised by: Geoff Herridge Darren Scott Principal Project Officer Director Economic Development & 24 March 2009 Major Projects COMMITTEE RECOMMENDATION ED09.0331.004 moved Cr Grummitt seconded Cr Young 1 That Council notes the outcomes of the enquiry by design workshop process. 2 That Council does not proceed with the development of a design option and

tender specification in conjunction with the development industry. 3 That before any redevelopment of the Surfers Paradise Transit Centre

progresses, the Director Planning Environment & Transport reports back to Council on the proposed scope, timing and cost of undertaking a master planning exercise for Surfers Paradise, with consideration given to a strategic vision encompassing social, economic and structural considerations.

4 That the Director Community Services submits a budget proposal to the 2009/10 budget process for the urgent maintenance and/or refurbishment of the existing complex.

5 That the Chief Executive Officer seek market competitive five year leases with an option for a two year extension for the existing and future lessees of the Transit Centre. The lease conditions is to include a termination clause should Council decide to redevelop the site before expiration of the lease.

CARRIED


ITEM 4 (CONTINUED) SURFERS PARADISE TRANSIT CENTRE SITE REDEVELOPMENT ENQUIRY BY DESIGN WORKSHOP OUTCOMES PN240206/46/02(P3)

ATTACHMENT 1



ATTACHMENT 2



ATTACHMENT 3



ATTACHMENT 4



ATTACHMENT 5



ATTACHMENT 6


ITEM 5 MAJOR PROJECTS BRANCH EVANDALE CULTURAL AND WORKPLACE PROCESS REPORT NO 2 LG235/46/03/03 Refer 15 page attachment 1 BASIS FOR CONFIDENTIALITY Not applicable. 2 EXECUTIVE SUMMARY Not applicable. 3 PURPOSE OF REPORT To inform and receive support from Council for the Evandale taskforce request to hold a design competition for the Evandale cultural and workplace precinct master plan and subsequent process for conducting such a design competition. 4 PREVIOUS RESOLUTIONS Council at its meeting of 2 February 2009 resolved in part G09.0202.001: “5 That the Council proceed as a matter of priority to address all aspects of part 4 (as

below) of Council Resolution G08.1124.003 of its meeting of 24 November 2008 so as to inform its future deliberations around staff accommodation.

That, for future consideration and as a component of the long term accommodation solution, the CEO bring forward a process to include a tendered design for a cultural heart and iconic ESD Workplace at Evandale ensuring that all buildings are constructed or renovated so that they meet the NABERS 5 star standard in their environmental performance. The design and process is to include:

a) Workplace of up to 25,000m2 GFA;

b) Integration with a whole of site civic and cultural precinct;

c) Enhanced and/or new pedestrian linkages to Surfers Paradise;

d) Commercial car parking;

e) Adequate opportunities for community feedback and consultation in the design process.”

6 That Council establishes the Evandale Precinct Task Force and that the terms of reference for the task force be as set out in Attachment 1 with an amendment to the membership to include the following additions:

Chair of Gold Coast Arts Centre Board

Representative of the Friends of the Arts Centre .

City Planning Committee Chairperson, Cr Shepherd, in place of Cr La Castra.


ITEM 5 (CONTINUED) EVANDALE CULTURAL AND WORKPLACE PROCESS REPORT NO 2 LG235/46/03/03 Council at its meeting of 9 March 2009 resolved G09.0309.009

1 That Council note the proposed Evandale Master Plan process and endorse, in principal, the appointment of suitably qualified design experts to prepare the Evandale Master Plan.

2 That the appointment of the above consultants and preparation of the master plan be undertaken once Council’s Evandale Precinct Task Force has had the opportunity to assess planning constraints, flooding issues and a needs analysis of specific cultural, civic and workplace uses that will be appropriate for the Evandale site, and present their deliberations to Council for consideration.

3 That Council notes the budget request for 2009/10 will be presented to the special budget committee process.”

5. DISCUSSION 5.1 Design Competition The Evandale Taskforce at its meeting of 9 March 2009 requested an open design competition be held to develop the Evandale site master plan. As a result the Taskforce has requested that Council consider undertaking a design competition as an alternative to the normal tender arrangements for production of the master plan. The Taskforce anticipate this approach may elicit a wider range of possible design solutions than would normally be achieved through a tender process Should Council elect to conduct a design competition for this purpose it is appropriate that it be conducted using the Royal Australian Institute of Architects (RAIA) “Guidelines for Architectural Design Competitions” as the competition planning and governance process. The use of the RAIA methodology (Attachment 1) would facilitate RAIA endorsement of the design competition and ensure that the competition is promoted widely to the RAIA members to maximise interest and to engender confidence in the integrity of the competition. It is also recommend that the competition be limited to accredited architects. 5.2 Design Competition Objectives The overall intent of the competition is to produce a master plan that will be used as the development guide for the Evandale precinct. It is assumed competition entries should consider and acknowledge the structure and scale of the Evandale precinct and present design ideas on how to revitalise this pivotal civic space for the city. The objectives of the master plan competition are to: • create a focus for Evandale site that enriches the cultural life of the city with new

activities, buildings and spaces

• create effective and innovative connections between the site and the surrounding precinct

• interpret and embrace the history and cultural importance of the site

• attract and extend activity across the entire site


ITEM 5 (CONTINUED) EVANDALE CULTURAL AND WORKPLACE PROCESS REPORT NO 2 LG235/46/03/03 5.3 RAIA Design Competition Guidelines Whilst, the RAIA design competition guidelines allow for a number of different types of design competition the most appropriate type for the Evandale Precinct project is an “Ideas Competition”. The major advantage of conducting an ideas competition is that it is specifically to be used for projects that may or may not be built. As there is no identified monetary commitment to proceed to detail design and construction of any facilities on the Evandale site, offering the winning designer development rights isn’t applicable at this time and without a prize pool available the competition may receive limited interest. If Council supports an ‘ideas design’ competition for Evandale then it would be recommended to ensure support by the RAIA by appointing a competent advisor to the project. The advisor is to be an impartial intermediary between the Client and the jury. As a consultant to the Council, the competent advisor’s role would be as an independent architect directly responsible for planning, organising and running the design competition. It is envisaged that the winning ideas competition design will be subject to additional detailed design and modification to deliver the best possible site outcomes. 5.4 Evandale Site Constraints (Due Diligence) In order to develop a comprehensive and usable brief to be used for the ideas design competition, the constraints associated with the Evandale site will need to be investigated and documented. This body of work is already underway and is required before master plan design work can begin on the Evandale site. Currently work is underway to investigate and report on the specific parking, traffic and road network capacity in the Evandale precinct. These early traffic modelling investigations are projected to be completed by June 2009 and will be reported to the Evandale Taskforce and Council. Additionally geotechnical investigations are currently being undertaken to provide designers the soil conditions for building and underground car parking options. Work is also underway by the Evandale Taskforce to identify all of the required facilities and proposed usages within the site. The developed facilities and functional briefs, along with the identified flood modelling and relevant local area planning requirements, will be included in the master plan design brief along that would be provided to the ideas design competition entrants. 5.5 Design Competition Process The competition would be conducted in a staged manner as described below: • finalise site constraints

• facility/usage inclusion list and functional use

• master plan design brief development

• agenda report for Council adoption of master design plan brief


ITEM 5 (CONTINUED) EVANDALE CULTURAL AND WORKPLACE PROCESS REPORT NO 2 LG235/46/03/03 • advertise and market competition

• competition activities

• competition judging and awarding of prizes (see section 5.5 below detailing design competition cost)

• agenda report for Council approval of master plan 5.6 Design Competition Jury It is proposed that the competition be judged by a panel of five noted experts in the fields of architecture, sustainability and culture. The panel could be comprised of three architects along with one sustainability and one cultural expert. and support by a technical advisory panel of council officers. The panel positions will be allocated based by the project team based upon the experts availability and project time requirements. 5.5 Design Competition Cost For the ideas competition to gain industry support and increase the probability of Council obtaining a pool of quality submissions it is proposed that a competition prize award be given in accordance with RAIA guidelines. The paying of a prize award will also enable Council to obtain rights over the submissions and intellectual property of the submitted schemes. The projected cost associated with conducting the design competition is detailed in section 10 below. 6 STATUTORY MATTERS Not applicable 7 CORPORATE/OPERATIONAL PLAN Not applicable 8 COUNCIL POLICIES The development of the Consolidated ESD Workplace underpins Council’s Climate Change Policy of being carbon neutral by 2020. Council purchasing policy F01.1211.006 9 DELEGATIONS Not applicable.


ITEM 5 (CONTINUED) EVANDALE CULTURAL AND WORKPLACE PROCESS REPORT NO 2 LG235/46/03/03 10 BUDGET/FUNDING The original project budget projections indicated an approximate cost of $140,000 to obtain a master plan by an appointed architectural consultant. The competition award prize money set out below is based upon the RAIA schedule of recommended prizes. The shortfall of $65,000 would need to be funded as an additional request through the 2009/2010 budget submission as there are insufficient funds in Cost Centre 555 project No’s. JN11 to pay for the design competition and related works as detailed in Table 1 below. Table 1 Design Competition Costs

Item Estimated Cost First place prize award $90,000 Second place prize award $45,000 Third place prize award $15,000 Professional competition advisor $15,000 Competition marketing and support $20,000 Contingency $5,000 Judging panel support $15,000 Total $205,000 11 COORDINATION & CONSULTATION Detailed discussions and design competition planning were conducted with the office of the City Architect , Manager of Technical Services and other relevant Council officers. 12 TIMING It is intended that the design competition be progressed along the following proposed schedule:

Date Milestone 6 April 2009 Agenda report to seek competition approval April 2009 Site constraints review May 2009 Site inclusion and constraints completion June 2009 Council agenda report site constraints and project

brief report June-July Design brief updates and preparations August 2009 Design competition marketing September 2009 Design competition October 2009 Design competition ends October 2009 Judging designs November 2009 Council agenda report on winning design 13 STAKEHOLDER IMPACTS Not applicable


ITEM 5 (CONTINUED) EVANDALE CULTURAL AND WORKPLACE PROCESS REPORT NO 2 LG235/46/03/03 14 CONCLUSION The Evandale Taskforce requested an open design competition be held to develop the Evandale site master plan. The intent of the design competition is to offer Council a concept master plan that will be used as the development guide for the Evandale precinct. It is recommended that the Royal Australian Institute of Architects (RAIA) “Guidelines for Architectural Design Competitions” be used to facilitate the competition planning and governance process. The Evandale site constraints in relation to traffic, parking, flood, planning and geotechnical issues need to be investigated and documented and included in the design brief. The projected cost associated with running the competition is $205,000. 15 RECOMMENDATION It is recommended that Council resolves as follows: 1 That Council endorse the proposed Evandale Master Plan ideas design competition

process as detailed in this report, subject to funding availability in the 2009/2010 budget.

2 That only registered architects be eligible to submit designs for the competition.

3 That Council notes the budget request for 09/10 will be presented to the special budget committee process.

Author: Authorised by: Darren Langen Darren Scott Coordinator Major Projects Director Economic Development & 17 March 2009 Major Projects COMMITTEE RECOMMENDATION ED09.0331.005 moved Cr Young seconded Cr Betts 1 That Council endorse the proposed Evandale Master Plan ideas design

competition process as detailed in this report, subject to funding availability in the 2009/2010 budget.

2 That only registered architects be eligible to submit designs for the competition. 3 That Council notes the budget request for 09/10 will be presented to the special

budget committee process.

CARRIED


ITEM 5 (CONTINUED) EVANDALE CULTURAL AND WORKPLACE PROCESS REPORT NO 2 LG235/46/03/03

ATTACHMENT 1



ATTACHMENT 1


ITEM 6 MAJOR PROJECTS BRANCH HOPE ISLAND REPORT 103 – MARINA QUAYS PRECINCT 2 PLAN SEALING WF54/16/-(P43) 1 BASIS FOR CONFIDENTIALITY Not applicable. 2 EXECUTIVE SUMMARY Not Applicable. 3 PURPOSE OF REPORT The purpose of this report is to advise council on the outcome of plan sealing for Marina Quays Precinct 2 at Hope Island. 4 PREVIOUS RESOLUTIONS Council at its meeting of 12 December 2008 resolved in part G08.1212. 021 as follows: "5. That the Chief Executive Officer (Director EDMP) brings a further report to Council on

the outcome of plan sealing for Precinct 2 of the Marina Keys development with the outstanding special charges secured against a bank guarantee."

5 DISCUSSION An agenda item was presented to Council on the 12 December 2008 on options to support and assist the economy of the Gold Coast. Included as a part of this was a request by Fish Developments that the special charges levied on the parent lots for Marina Quays Precinct 2 be redistributed or re-levied to the subdivided lots. In 2008 Council levied a number of special charges on lands at Hope Island. The Marina Quays development being undertaken by Fish Developments Pty Ltd is included among those levied and is a significant development for Hope Island and the Gold Coast. However, a condition of plan sealing is that outstanding rates and charges, included the Hope Island Special charges, are paid in full. Fish Developments formally requested that Council give consideration to the prospect of sealing relevant plans of subdivision without having the outstanding rates and charges paid. At is meeting of 12 December 2008 Council resolved that plan sealing would be allowed if outstanding Special Charges were secured against a bank guarantee. A letter was forwarded to Fish Developments advising them of Council's resolution. Fish Developments elected to pay all outstanding special charges rather than secure against a bank guarantee. As such, all plans have been sealed. 6 STATUTORY MATTERS Not Applicable. 7 CORPORATE/OPERATIONAL PLAN Strategic Priority 14 - Leadership and Governance: To achieve the following outcome: 14.1.1 Council decisions, policies and actions effectively address Strategic Priorities.


ITEM 6 (CONTINUED) HOPE ISLAND REPORT 103 – MARINA QUAYS PRECINCT 2 PLAN SEALING WF54/16/-(P43) 8 COUNCIL POLICIES Not Applicable 9 DELEGATIONS Not Applicable. 10 BUDGET/FUNDING Not Applicable 11 COORDINATION & CONSULTATION Coordination and consultation occurred with Payments and Recovery, Organisational Services regarding confirmation on that all accounts associated with sealing Marina Quays Precinct 2 have no outstanding rates. 12 TIMING Not Applicable. 13 STAKEHOLDER IMPACTS Not Applicable 14 CONCLUSION Council considered an agenda item regarding a request from Fish Developments that Council give consideration to the prospect of sealing relevant plans of subdivision without having the outstanding rates and charges paid. Council resolved to allow plan sealing with outstanding special charges secured against a bank guarantee. Fish Developments were advised of Council's position and elected to pay the outstanding rates in full. As such, plans for Marina Quays Precinct 2 have been sealed. 15 RECOMMENDATION It is recommended that Council resolves as follows: That Council notes Fish Developments elected to pay all outstanding rates in full to allow Precinct 2 of Marina Quays plans to be sealed. Author: Authorised by: Justin Harris Darren Scott Project Officer Director Economic Development and Major Projects 13 March 2009


ITEM 6 (CONTINUED) HOPE ISLAND REPORT 103 – MARINA QUAYS PRECINCT 2 PLAN SEALING WF54/16/-(P43) COMMITTEE RECOMMENDATION ED09.0331.006 moved Cr Betts seconded Cr Young That Council notes Fish Developments elected to pay all outstanding rates in full to allow Precinct 2 of Marina Quays plans to be sealed.

CARRIED


CLOSED SESSION SECTION 463 LOCAL GOVERNMENT ACT 1993 PROCEDURAL MOTION moved Cr Young seconded Cr Grummitt That the Committee move into Closed Session pursuant to Section 463 of the Local Government Act 1993, for the consideration of the following Item for the reason shown:-

Item Subject Reason

7 Hope Island Report 104 – Outstanding Land Dedications

Prejudicial Matter

CARRIED

PROCEDURAL MOTION moved Cr Betts seconded Cr Grew That the Committee move into Open Session.

CARRIED


ITEM 7 MAJOR PROJECTS BRANCH HOPE ISLAND REPORT No 104 - OUTSTANDING LAND DEDICATIONS WF54/16/-(P43) REPORT CONFIDENTIAL

Committee Recommendation Changed at Council 3 April 2009 COMMITTEE RECOMMENDATION ED09.0331.007 moved Cr Grew seconded Cr Grummitt 1 That the report/attachment be deemed a confidential document and be treated as

such in accordance with sections 250 (2) and 1143 (4) of the Local Government Act and that the document remain confidential unless Council decides otherwise by resolution.

2 That Council notes the old surveyors' certification of the old survey plans presented in the Attachments 2-10 have expired under the Surveyors Act 1977 and the Land Title Act 1994 requires new certifications for registration.

3 That Council acquire the outstanding canal land required to ensure legal ownership of all lands in the Hope Island canal as described in Attachment 11 to this report and shown on the respective plans attached to this report (refer Attachment 2-10).

4 That Council serve Notices of Intention to Resume the land described in recommendation 3 for drainage and flood mitigation purposes in accordance with Section 7 of the Acquisition of Land Act 1967.

5 That Council subsequently considers any objections as a result of recommendation 3 above, in accordance with Section 8 of the Acquisition of Land Act 1967, and provided that there are no objections, Council apply to the Minister for Natural Resources & Water for the resumption of the lands in Attachment 11 in accordance with the provisions of the Acquisition of Land Act 1967.

6 That the reasonable costs of survey, valuation fees, legal costs, registration, stamp duty and any other fees connected with the acquisition and issue of a copy of the Certificate of Title be at Council’s expense.

7 That funding of $180,000 be considered in the 2009/2010 budget deliberations. A division was called. For: 4 Cr Douglas, Cr Grummitt, Cr Grew, Cr Betts, Against: 1 Cr Young Absent: 0 Abstained: 0

CARRIED


ITEM 7 (CONTINUED) HOPE ISLAND REPORT No 104 - OUTSTANDING LAND DEDICATIONS WF54/16/-(P43) REPORT CONFIDENTIAL CHANGED AT COUNCIL 3 APRIL 2009 RESOLUTION G09.0403.028 moved Cr Betts seconded Cr Wayne That Committee Recommendation ED09.0331.007 be adopted with the addition of a part 8 to read: 8 That the Chief Executive Officer give further consideration to the possibility of

recovering the funds and report back to Council.

CARRIED There being no further business the meeting closed at 4.39pm.


These pages

Numbered 1 to 111

Constitute the Adopted Report Of The Meeting

Of The Economic Development and Tourism Committee

Held on 31 March 2009

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