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1 12.1 COMPARISON OF BUSSELTON JETTY REBUILD OPTIONS REPORTING OFFICER Chief Executive Officer – Andrew Macnish Director Community and Organisational Development - Matthew Smith Director Lifestyle Development – Nigel Bancroft Director Community Infrastructure – Mark Goodlet, Executive Manager Systems and Information - Cheryl Ling Economic Development Manager – Paul Martin FILE NO: DEV3 ATTACHMENT(S): 1. Summary Matrix of options of Jetty Rebuild prepared by AMD Chartered Accountants. 2. Report from AMD Chartered Accountants – Circulated under separate cover. This report is provided to Council accompanied by a declaration in accordance with Section 5.70(2) of the Local Government Act 1995, that one of the Officers providing input into the report (Paul Martin) owns a residential property in the CBD. This property is his place of residence. PRÉCIS This item presents a comparison of the options available to Council for a rebuild of the Busselton Jetty together with the associated analysis of the short term and the longer term impact on the Shire’s finances. The report compares the upfront capital costs together with the ongoing maintenance costs and makes comment on the overall cost to the Shire over the coming 50 years. Assessing the ability for the Jetty to fund its maintenance requirements into the future is critical to underpinning of this (icon) asset’s sustainability. In accordance with the Council requirement, this report also presents a report from AMD. It was commissioned to audit BJECA’s previous and future projections of operating surplus and associated assumptions as these are critical elements to the financial modelling of future sustainability of the Jetty. The information contained within this report reaches a conclusion that the Jetty can only be sustainable and cover all future maintenance and capital costs with minimal support from the Shire by accepting the State Governments offer towards the rebuild. The financial analysis clearly demonstrates that the more capital works that can be done upfront, combined with the benefit of leasehold monies subsidising maintenance cost, then the less the Shire will have to prop up ongoing funding for the jetty through ratepayer funds. Whilst the financial modelling exercise demonstrates a certain sensitivity to various parameters there appears to be sufficient scope to progress negotiation with the State. As such Officers are recommending Council 2 accept the State Government offer towards rebuilding the Jetty (with works commencing in Spring 2008) and attempt to seek a contribution from the newly elected Federal Labor Government. BACKGROUND There has been significant background to this item the most of which is summarised in an item to Council on 26th September 2007. Subsequent to this item being considered Council resolved the following at its meeting of 31st October 2007: C0710/269 1. That Council Decision C0709/228 of 26 September, 2007 be revoked. 2. That the Council delegate authority to the CEO to write to the State Government and advise them of the above decision. 3. That Council extends the term of the Busselton Jetty Advisory Committee (BJAC) to the date of the next ordinary election and requests the existing members to continue their membership until that time. Should there be a change in the Shire President, then that Councillor be replaced on the Committee by the current serving Shire President as is his/her right pursuant to Section 5.10(4) of the Local Government Act 1995. Councillors then received a briefing from Busselton Jetty Advisory Committee and the State Government on their respective positions regarding the Jetty Rebuild. This information resulted in the following Council resolution made at its meeting of 14th November 2007: C0711/285 1. That Council defer considering the BJAC report and the recommendations in item 15.5 of the Council agenda for 14 November 2007, on Busselton Jetty Rebuilding options, pending the completion and reporting to Council of an analysis provided by the Shire’s Auditor (AMD) which shall include, but not be limited to, the following: (a) A 50 year maintenance plan of Option 1 indicating the sustainability of the Jetty to fund future maintenance and capital costs following works proposed in the spring of 2008. This be based upon BG&E’s maintenance and capital cost projections associated with Option 1 and identify the annual amount required to be placed into a reserve to cover 3 all projected upgrade and maintenance costs for the next 50 years. (b) Review of BJECA’s annual audited profit and loss statements and assessment of the validity and provide comment on the future surplus projections made by BJECA. (c) Review previous work undertaken in respect to the State Government’s offer and prepare the information to enable an “apples to apples” comparison between the two options 2. That a report be considered at the 28 November 2007 Council Meeting addressing the issues above and complying with the whole of life asset maintenance cost analysis required as per Council resolution C0710/240. In line with this, AMD Chartered Accountants (the Shire’s auditors) were engaged to undertake this investigation and the summary of these results is attached at Attachment 1. A detailed report on this investigation is circulated under separate cover. Since Council’s resolution on the 14th November the Federal Government election has occurred. Prior to the election the Coalition made a commitment that if re-elected it would contribute $6 million towards the rebuild on the condition the State made a cash contribution not tied to land sales. The Labor party would not commit prior to the election. Given the Labor party victory the Coalition offer lapses. The Regional Partnerships application to DOTARS for $4 million still remains in the system awaiting a formal government response. CONSULTATION There has been extensive consultation on this matter previously. Limited consultation has occurred in preparation of this item as it has not been required. Should Council accept the State Government’s offer, continued consultation would be undertaken with groups effected by the relocation from Churchill Park and other parties directly affected. Shire Officers would also be advocating that Landcorp undertake extensive consultation with the community and stakeholders on the detailed design of the areas to be redeveloped. STATUTORY ENVIRONMENT There is no requirement for a Business Plan in accordance with the Local Government Act 1995 Section 3.58 unless the Shire purchases freehold the land associated with the sporting groups relocation for a value exceeding $1 million. 4 Should Council choose to accept the State Government’s offer the following would occur: 1. A project agreement between the Shire and the State would be finalised and presented to Council for consideration. This document would outline all the issues associated with the partnership between the State and the Shire. Drafting of this document had commenced but ceased with the decision of Council of the 31st October. 2. A revised Jetty Licence would be finalised and also presented to Council for consideration. This licence would replace the 1988 licence and clarify a number of issues. As with the project agreement, drafting of this item had commenced but ceased with the decision of Council of 31st October. 3. The Shire would be involved in the preparation of a development guide plan (DGP) for the foreshore area with Landcorp. This would include details on the primary allocation of land use, access, open space, community facilities etc. This information would be required to allow for full consideration of any rezoning requests. Further to this and after the land use allocation has been agreed detailed design guidelines would be prepared by Landcorp in conjunction with the Shire for the private development areas and detailed specification for the public reserves to ensure an appropriate level of public amenity is achieved. 4. Landcorp would prepare and submit for consideration a rezoning application for the parcels of land to be developed. This would be supported by development proposals for the land forming part of the DGP. Such an application would be dealt with by the Shire as per any other rezoning application and given the significance of this proposal the proponent (Landcorp), would be required to liaise with the Shire and potentially the Council in working up the detail of its proposal. In conjunction with the rezoning application the State offer requires Council to relinquish vesting of the Crown reserves affected by the proposal. Council would consider this request at this point in the process. As can be seen there are many decision-making steps involved and opportunities for Council to be involved with finalising the detail of the State’s offer over the coming months. The State’s funds associated with their offer will not become available until Council has initiated rezoning and relinquished vestings of the land to be developed. In addition to this process an agreement document will need to be prepared by the Shire covering its requirements for the operations of the Jetty. This can then be negotiated with BJECA and incorporate any other project parameters that will depend upon the construction timing. Specifically this would need to include access and business operations during (sectional) construction. The results of these negotiations would be detailed in a future report to Council for consideration. 5 POLICY IMPLICATIONS Council resolved on the 17 October 2007 to prepare a policy requiring the following: C0710/240 1. That Council note this report and formally acknowledge the significance of this matter to the Shire through its consideration of corporate documentation such as the strategic plan, corporate plan and financial plans. 2. That Council endorse the development of a policy relating to new asset creation and gifted assets. This policy would include requiring new asset creation decisions to be preceded by a whole of life cycle cost analysis, determination as to whether the asset would be replaced at the end of its useful life and if so, how this would be funded with intergenerational equity in mind. 3. That Council reiterate the requirement to have in place an Asset Depreciation Reserve and the require that all new assets have an allocation to asset replacement reserve funding, where the decision has been made to replace the asset at the end of its design life. While the policy has not yet been drafted, any consideration for spending significant sums of money on the Jetty (an asset the Shire is responsible for) clearly needs to be cognisant of whole of life costs and replacement options. On this basis a whole of life plan has been developed for the Busselton Jetty costed out and utilised to compare various reconstruction options. Without whole of life costing it is difficult to understand the impact of delaying capital works or taking into consideration full replacement costs of the facility in the future. FINANCIAL IMPLICATIONS Borrowings overview The Shire's current year adopted budget includes a planned borrowing for Jetty upgrade works of $2 million. The Shire's current adopted 5 Year Financial Plan reflects a further borrowing of $4 million in the following financial year ie 2008/09 totalling a borrowing of $6 million. Each of the options modelled by AMD Chartered Accountants requires additional borrowings by the Shire as follows (refer to the Officer Comment section of this report for a description of each Option): Option A : + $1.0 million totalling $7.0 million Option B : + $2.6 million totalling $8.6 million Option C : + $2.7 million totalling $8.7 million Option D : + $5.0 million totalling $11.0 million Option E : + $11.0 million totalling $17.0 million 6 Options A is similar to the option recommended by BJAC and is not reliant upon acceptance of the State Government’s offer. Inclusion of the additional borrowing requirements as set out above in the Shire's annual budget for 2008/09 satisfies the requirements of S6.20 of the Local Government Act. Each of the options from B to E assumes the return to the Shire by the State of $6 million plus interest after 5 years. Appropriate accounting processes will be instigated to ensure the clear and separate identification of project costs enabling the "acquittal" and subsequent reimbursement of $6.0 million plus interest from the State Government after 5 years. It should be noted that under Options B to E borrowing costs for the amount of $6 million to be returned to the Shire after five years have not been included in the financial modelling. There is a net nil cost to the Shire over the initial five year period. There is however a cashflow impact in the amount of $420,000 for each of the first five years. Ability to borrow As noted above, the current adopted 5 Year Financial Plan already reflects a $6 million borrowing by 2008/09. The estimated debt service ratio as a percentage of rates and untied grants for 2008/09 is 4.71% and which is comfortably below the maximum recommended ratio percentage of 10%. It is considered that the borrowing capacity of the Shire, with the current definition of the debt service ratio, could accommodate the Shire loan options from A through to E with a debt service ratio of 9.9% with option E. It should be further noted however that each of the options from B provide a rental income stream to assist in the servicing of Shire debt. In reference to the $1 million Shire contribution requirement under Option E for each of years 1, 2 and 5, and $668,000 in year 3 and $102,050 in year 4 (we refer also Option B and the $1 million requirement for years 1 to 7) it should be noted that the current 5 year financial plan already supports the debt servicing cost of a $6 million borrowing in the amount of $567,000 per annum for 20 years. Opportunities to fund the difference between the two amounts or indeed the full $1 million could be explored to further reduce the funding requirement from general rate revenue if a Federal Government contribution was not forthcoming. Financial Sustainability and Opportunity Cost Option A requires a Shire contribution of $99 million over a 50 year period and provides little or no surplus funds at that period end (refer comments below). Option B through to Option D provides a reducing level of Shire contribution over the 50 year period ranging from $8.8 million to $978,014. 7 The large Shire contribution required under Option A would constrain funding available for other Shire activities particularly in years 1 to 7 (Shire contribution of $3 million per annum) and as such represents a considerable opportunity cost. Additionally, aspects of the Leisure Services Plan which are addressed as part of options B to E are not included in Option A. Options B through to D project a decreasing annual financial impost (across the options) on the Shire such that other strategic imperatives could also be addressed. The projected surplus particularly under Option D provides an opportunity for the Shire to address the important issue of the community infrastructure asset gap if utilisation of the surplus arising could be negotiated to be used for such purpose. Risk assessment The long term nature (50 years) of the cost and income projections included in the financial model carries inherent risk as regards the accuracy of such projections. Assumptions in respect of cost escalation factors, interest rates and income expectations are an essential component of any financial model but an appreciation of the sensitivity of a financial model over 50 years to even relatively minor variations should not be underestimated. Option A predicts net surplus funds after 50 years of $732 and as such provides very little margin for variation in that a minor shortfall in estimated annual operator profit or increase in relevant cost indices could have the consequence of requiring the Shire to fund further amounts in addition to the $99 million already estimated. Options B, C, D and E represent lower risk strategies with Option D offering the most resilience to variations in the financial model assumptions with an estimated net surplus after 50 years of $182 million. STRATEGIC IMPLICATIONS Ensuring the long term sustainability of the Jetty must be one of the highest priorities for the Shire at this juncture. The Jetty is a key tourism and community iconic asset for the Shire and the region with an excellent opportunity to be made sustainable into the future. Rebuilding the Jetty is a key project identified on Council’s endorsed Strategic Plan. In the words of the South West Development Commission CEO, this offer (of the State) is a very good one. It is understood the Minister for the South West is very interested in the outcome of Council’s consideration of this report. Arguably, the future of the MOU with the State is riding on the success (or otherwise) of this flagship Jetty Rebuild Project. In addition to this, many reports commissioned by the Shire since the 1980s have identified the need for improvements to the foreshore area and improving links between the foreshore and the CBD. The State Government’s offer has the potential to achieve this in line with community expectations and values. The project plan to relocate sporting groups is 8 another important strategic element that should not be understated as it addresses many issues identified in the Shire’s Leisure Services Plan. OFFICER COMMENT Options Analysis AMD Chartered Accountants have prepared a number of options to be able to compare Councils options in respect to the Jetty Rebuild. These are: Option A: New section 2, short term repairs to sections 3 and 5. Drive piles for two swimming platforms. Total cost $8,519,000. This is funded by a Shire contribution of $7 million and $1.6 million from BJECA. Option B: Rebuild sections 2,3 and 5 and Scout Road Boat Ramp. Total cost $16.2 million funded by $1.6 million from BJECA, $8.6 million from Shire, and $6 million from the State Government. Option C: Rebuild sections 2,3,5 and 10 and Scout Road Boat ramp. Total cost $22.3 million funded by $1.6 BECA, $8.7 million from Shire, $6 million State Government, $6 million Federal Government. Option D: Full restoration including – rebuilding sections 1,2,3,5 and 10. Repair sections 4,6,7,8 and 9 and Scout Road Boat Ramp. Total cost $24.6 million funded by $1.6 million BJECA, $11 million Shire, $6 million State Government and $6 million Federal Government. Option E: Same scope as option D. Funded by $1.6 million BJECA, $17 million Shire, $6 million State Government. The financial implications of these options on the Shire is outlined in Attachment 1 and in the report from AMD Chartered Accountants circulated under separate cover. The results of the analysis conducted by AMD Chartered Accountants clearly indicate from a cash flow, financial impost on the Shire and risk point of view option D is the most suitable. Option D requires Council acceptance of the State Government offer and attempting to secure a commitment from the newly elected Federal Labor Government. Option D could be structured in a manner to undertake works in the spring of 2008 (an important point noted by BJAC) to get the train running again. The final details associated with the structure of the tender to best accommodate works occurring in line with the budget available is being finalised and will be presented to Council early in the new year. BJAC has done a sound job in producing options associated with the Jetty rebuild and recognises the importance of getting on with reconstruction works as soon as possible due to very sharp upward pressure brought about by cost escalation. However the option recommended in their report does 9 not address the sustainability of the Jetty and more importantly has the highest financial impact on and risk to the Shire. Acceptance of the State’s offer impacts significantly on the financial sustainability of the Jetty as it: * Provides a cash injection of $6 million upfront. The model demonstrates the more the Shire spends now the less the ongoing costs of maintenance are. The high level of cost escalation rate is also combated. * Returns a contribution to the Shire at the end of the project (in this case assumed to be 5 years) equal to the Shire’s upfront contribution towards the rebuild subject to surpluses being available. Officers instructed AMD Chartered Accountants to take a pessimistic view and cap the return to the Shire at $6 million plus interest. This figure may have the capacity to increase depending upon the land development project surpluses which will only improve the options involving the State. It is proposed to include in the draft project agreement a clause which will provide the Shire with an annual audit of the project to track and continually predict likely surpluses and thus the potential return to the Shire. * The creation of 4 additional ground leases provide an income stream which feeds the maintenance fund and thus reduces the Shire’s liability to top up the annual requirement for the fund. (thus reducing impact on ratepayers and establishing a balance in the trust fund capable of earning significant interest). Although it could be argued the State may agree to creation of these ground leases without the current State offer, it is clear the Shire would have to share this income with the State (represented in current State Government Policy) and also contribute towards the creation of the lots including services. Both of these issues would impact upon the financial attractiveness of these leaseholds outside of the current State offer. An important aspect of the model is the financial surpluses achieved by the Jetty operator (BJECA). The Shire’s reliance on these surpluses would need to be secured in the commercial agreement between the Shire and BJECA to clearly articulate surplus targets and monitor entry prices and other variables in the financial model. Federal Government funding Although a commitment was not secured from the Federal Labor Party prior to their election win, Officers consider it worthwhile to continue to pursue this matter given an application for $4 million remains in the system. Correspondence has been received on 27th November 2007 from the Principal Advisor of the Regional Partnerships program seeking direction from the Shire as to if it intends to withdraw the application for $4 million given, they claim, the Shire has rejected the State Government’s funding 10 offer and is only going to progress with a smaller project. On this basis it is clear that a contribution of this magnitude from the Federal Government is only possible with a contribution from the State Government. The author of the correspondence is basing this information on an article which appeared in the West Australian. Should Council resolve to accept the State Government’s offer towards the rebuild Officers will advise DOTARS the application is not being withdrawn. Given this it is proposed that a delegation be sent to Canberra similar to previous delegations to raise awareness of the project and seek a resolution to the Regional Partnerships application. This should be initiated as soon as the new cabinet is announced. Officers would also seek the State Labor Government’s assistance in securing a Federal Government contribution. The details of what this assistance might include will be discussed with the State should Council accept the State Government’s offer towards rebuilding the Jetty. Should a timely Federal Government contribution not be forthcoming, Officers would recommend Council proceed with Option E and explore options to offset the annual contributions required in the first few years at that time. Progressing the Planning Aspects of the State Government’s Offer The land development components of the State Government’s offer have the potential to set the direction for the future development of Busselton and thus impact on the future character and functionality of the town. Understandably, constituent development proposals will give rise to interest and debate in the community. Consideration of these issues, as will occur following receipt of a rezoning application, should be made in a land use context and not a financial context. Council will have the primary role in the determination of these matters being the statutory decision maker on any initiation of a change to the town planning scheme. Should the Shire wish to proceed with negotiation on the State’s offer, Council may wish to reinforce with Landcorp at this stage the necessity for the Council and the community to be fully engaged in this process. Commencing works in Spring 2008 As previously indicated Officers strongly support the commencement of works on the Jetty Rebuild in the Spring of 2008. Council would be responsible for determining the final scope of these works as part of the tender process. Setting the scope will depend upon the timing of the commitment to release the State Government upfront contribution. Even if delays in resolving planning detail associated with the State Government’s offer occur, some works can commence in Spring 2008. 11 Summary of comment The issue of the Busselton Jetty Rebuild has been the subject of 2 years of community and Shire debate and extensive media coverage. It is hoped that this item represents a certain culmination and provides a clear/decisive mandate for the Shire to strongly move forward in respect to this project. The information prepared by AMD Chartered Accountants clearly identifies the financial benefit to the Shire to accept the State Government’s offer and move ahead with a rebuild starting in the Spring of 2008. Officers are proposing the community and the Shire be extensively involved in the planning detail associated with the land development. Such involvement will provide an opportunity to address many of the issues which have been identified to date. Progressing the State Government offer will still require more decisions of Council in respect to the detail associated with the offer. Council therefore retains control over the process at this juncture. Continuing to purse a Federal Government contribution with assistance from the State Labor Government should be undertaken immediately and with gusto as it could greatly impact upon the financial implications on the Shire. TIMELINE/S FOR IMPLEMENTATION OF OFFICER RECOMMENDATION Should Council support the Officer recommendation the following would occur: 1. A project agreement between the Shire and the State Government and a new Jetty Licence would be brought to Council for consideration early in the new year. A commercial agreement with BJECA would soon follow. 2. The preparation of development options associated with the land development would occur in the coming months and culminate with Landcorp submitting an application for rezoning in April 2007. 3. Tender documentation would be prepared for Council consideration early in the new year so the works on Section 2, 3 and 5 can commence in the Spring of 2008. VOTING REQUIREMENT Simple Majority OFFICER RECOMMENDATION 1. That the Shire accepts and undertakes it has a shared responsibility together with the State to use its best endeavours to help ensure the 12 jetty is fully rebuilt and thereafter operated in a sustainable manner in perpetuity. 2. That the Shire recognises the Busselton Jetty is a critical element of the local, regional and State tourism and heritage infrastructure and ensuring its sustainability will occur through a pursuit of business excellence in jetty operations and complementary tourism support. 3. That Council endorse option D for the Jetty Rebuilding resolving to rebuild as much as possible in the coming years, commencing in Spring 2008. Tender documentation be prepared reflecting this approach. 4. That the commercial agreement between the Jetty Operators (BJECA) and the Shire to be drafted reflecting all necessary project conditions needing to be complied with. 5. That all efforts be made including a delegation to Canberra to secure a commitment towards the rebuild from the Federal Labor Government. 6. That Council notes the Jetty rebuild will not require expense in the current financial year. The additional borrowings required by Council and total project budget be reflected in the 2008/2009 financial year budget, Corporate Plan and Five Year Financial Plan. 7. That BJECA be requested to irrevocably commit its $1.6 million of retained surpluses from the Jetty operations to be expended in the first instalment of any Jetty Rebuild expenditure (including tender documentation) and inform the Shire of its compliance with this commitment as soon as practicable (ie at its next scheduled meeting or earlier via a special meeting). 8. That Council accept the State's conditional (14 point) offer with thanks and communicate this to the Minister for the South West together with its understanding that working within the framework of the State's position, the following values/matters underpin the Shire's acceptance: (the letter to emphasise the necessity for Council to have pursued the most up to date and independent cost modelling to satisfy its good governance requirements) (a) The Shire acknowledges this to be the foundation project conducted under the MOU with the State (May 2006) and looks forward to similar significant projects in the future. (b) The Minister for the South West be requested to reconsider condition number 12 of the State's offer pursuant to the outcome of the Federal Government position on its funding contribution. (c) The Shire enters into a Project Agreement with the State that contains the following and this document be drafted through the BJWG: 13 Jetty Maintenance Fund (JMF) This fund will be used to fund maintenance on the Busselton Jetty and to comply with the Jetty Maintenance Plan and Tourism Business Plan. This includes the maintenance of the UWO and the IC but not to the extent either of these two structures are replaced or demolished. Net returns from Jetty operations together with gross returns from the two existing (Goose and Equinox) foreshore leases plus the four new crown lease sites will be directed into the JMF. This fund will be established and administered to the satisfaction of both parties including its audit, however, the JMF will contain a clause that after five years of fund operation, it requires review. Unless this review demonstrates the continued justification of contribution of all monies it was established to receive then the Shire reserves the right to redirect surplus (to the projected JM plan needs) funds for the purpose of promoting and facilitating tourism within the shire (broad sense) which must still have a nexus to the jetty's operation. The JMF will be deemed to commence for the purpose of this five year review, if not already commenced, from the day of handover of the rebuilt jetty. Definition of Reserves Purpose/s For any and all reserves amended or created, the new reserve purpose shall be as indicated on page 41 and 42 of this report subject only to minor facilitative amendment for which the CEO has discretion to negotiate. In addition, applications for enterprises made under existing and/or new management orders will not be prejudiced by State agency value judgements, only whether they comply with the agreed purpose. Annual Audit report of Land Development project status An agreed independent auditor shall provide an audit statement to the Council about the project status including all details/projections on the quantum and timing and risk factors and other relevant variables for the recouping of the party's project cost contributions. This audit shall also be continued on an annual basis to the completion of the project. The State shall ensure all necessary data is made available in a timely manner to the appointed auditor to enable this audit to occur. The state to use its best endeavours to provide as much certainty as possible on the likely returns that might be available to the Shire at the time the Shire considers awarding the construction tender. Distribution of Land Development project surpluses 14 Distribution of land development project surpluses shall be on the basis of a 30% tax equivalent to the State, a 35% dividend to LandCorp and 35% dividend to the State until the State is repaid its $6m (net of any amount it has already been recouped from the englobo land purchase). Once project surpluses reach the point where the state has recouped its $6m outlay in this regard, the 35% State dividend shall flow to the Shire. After the Shire has recouped all of its project costs (including construction project management and interest), any project surpluses thereafter will be negotiated by the two parties. Jetty Licence A jetty licence shall be prepared at the State's cost (not a project cost) that shall contain a remedial clause that should the State not ensure the facilitation of all the conditions it is obligated to fulfil under the project agreement, then the Shire reserves its right to hand back the jetty licence at no cost to the Shire and with no further obligations other than to hand back full control of the jetty operations and six foreshore leases to the State. The jetty licence shall also contain a clause that allows the Shire the ability to self insure under LG Act S6.32(3)(a). The Council retains the right not to replace all or part of the jetty should all or part of it be removed through a catastrophic event or other act of God. Town Planning process LandCorp and the State will conduct the land development project in accordance with standard statutory processes and not as a public work and will secure with the Shire the use of a paid dedicated officer to expedite the planning assessment process should the best endeavours of the Shire's resources at the time be insufficient due to other operational workloads. A Class Reserve Retention / Establishment Churchill Park The undeveloped/recreational balance of Churchill Park (oval) and associated facilities shall be established as A class reserve for the purpose of recreation under the Land Administration Act with a management order with power to lease issued to the Shire for the reserve. The Shire will pay for the administrative component of the application for this new arrangement but shall pay no transfer fee or equity to the State. Signal Park / Existing A Class Reserves 15 Those areas of existing A class reserves and that part of Signal Park that do not form part of the final development land transferred to Landcorp are to be retained and/or set aside as A class reserves for the purpose of “recreation” or “recreation and camping” and with the power to lease as appropriate under the Land Administration Act, with management orders issued to the Shire for the resultant reserves. Busselton Surf Club A community purposes site/lease/reserve to be created adjacent to the Scout Hall with a power to lease to enable the club to run a kiosk. Rent (minimum) would be directed to the immediate foreshore maintenance. Independent dispute resolution mechanism There is to be an agreed independent dispute resolution mechanism as part of the project agreement. Each party will bear its own costs in attending to the project agreement and its implementation. Jetty Construction Principal The Shire will be the Principal for the Jetty construction project and any out of pocket cost in contracting expertise shall form a project cost recoupable under the funding model. Tender documentation shall be a project cost. Agreement to being the Principal is undertaken on the understanding the DPI and SWDC continue to participate in facilitating excellent project management oversight/co-ordination through specialist technical support to the Shire. Relocation of Groups Relocation of sporting and community groups effected by the proposal will be on the basis of like for like, new for old replacement of facilities. Land development project funds over and above those earmarked in the Landcorp feasibility already cited shall not be committed from the project without the resolution of Council. In addition, Council reserves the right to be the body/entity to acquire any land for the purpose of accommodating the relocated groups.
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