annual report for the year ended 30 june 2011 · john day bsc bdsc mla minister for planning;...

Proud history. Exciting future.

ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2011

Table of Contents

For the Year Ended 30 June 2011

Midland Redevelopment Authority Annual Report 2011 1

Page

Statement of Compliance with the Financial Management Act 2 1. Overview of Agency 3

Executive Summary 3 Operational Structure 4 Performance Management Framework 10

2. Agency Performance 12

Report on Operations 12 Financial Targets 13 Key Performance Indicators 13

3. Significant Issues Impacting on the MRA 18

Current Issues and Trends 18

4. Disclosures and Legal Compliance 20

Financial Statements 22 Key Performance Indicators 57 Ministerial Directives 64 Other Financial Disclosures 64 Governance Disclosures 65 Other Legal Requirements 66 Government Policy Requirements 70

Statement of Compliance



JOHN DAY BSc BDSc MLA MINISTER FOR PLANNING; CULTURE AND THE ARTS; SCIENCE AND INNOVATION In accordance with Section 63 of the Financial Management Act 2006, we hereby submit for your information and presentation to Parliament the Annual Report of the Midland Redevelopment Authority for the financial year ended 30 June 2011. This Annual Report has been prepared in accordance with the provisions of the Financial Management Act 2006.

Dr Fred Affleck CHAIRPERSON

Phil DiMasi DEPUTY CHAIRPERSON 9 September 2011

Overview



Executive Summary

The Midland Redevelopment Authority (MRA) has just completed its eleventh year of operations. Its vision is to enhance Midland by creating conditions that foster a strong economy that delivers more jobs, more opportunities and greater wealth for all West Australians. Its mission - Revitalising Midland – has the following guiding objectives: Attract people to Midland to live, work, learn and enjoy.

Integrate development to maximise benefits for the city and the community.

Enhance environmental, social, heritage and cultural values in Midland and around the redevelopment area.

Invest responsibly for sustainable economic outcomes.

Performance Highlights of 2010/11

Completion of the soil remediation of The Workshops subdivision.

Lodgement of the second Mandatory Auditor‟s Report with the Department of Environment and Conservation, which represents another critical milestone in the preparation of The Workshops for re-sale and re-use.

Ongoing collaboration with the Department of Health (DOH) to deliver the Midland Health Campus (MHC) by achieving a revised DOH Structure Plan, drafted site specific design guidelines and making significant progress on related transport and infrastructure plans.

Led the creation of Midland City 2041 - a 30 year vision for Midland which incorporates an infrastructure framework developed in partnership with key agencies.

Commencing planning process for the Midland Station Precinct working with the Public Transport Authority toward a new station and bus interchange at Cale Street adjacent to the MHC site.

Finalising a suite of heritage conservation plans for the major extant Workshops buildings and initiated an audit of all the heritage machinery and equipment.

Commencement of Building Works contract of $1.881 million let to Pindan for Block I to enable the strata titling of the lot to facilitate the co-construction of the Midland GP Super Clinic.

Installation of “The Ingot” public art piece in The Crescent and Keane Street roundabout completing the city centre public art program.

Completion of upgrade works to the Peace Statue and Memorial Garden allowing greater public access to the garden.

Continued to work with Raffles Education Corporation and relevant agencies to progress the development of a major private university on The Workshops site.

Publication of “Midland Redevelopment Authority - Celebrating 10 Years” commemorating our 10 year anniversary.

Overview



Completion of the Foundation Housing mixed-use development and Diploma residential development providing the first 72 apartments to The Workshops site.

Finalisation of the former Midland Livestock Saleyards transfer to the MRA and completion of the revised concept plan and business case.

Operational Structure

Enabling Legislation

The MRA was established under the Midland Redevelopment Act 1999 (the Act) and commenced operations on 1 January 2000.

Responsible Minister

John Day BSc BDSc MLA, Minister for Planning; Culture and the Arts; Science and Innovation. Mission

Revitalising Midland. As provided by the Act, the functions of the MRA are to plan, undertake, promote and coordinate the development and redevelopment of land in the defined redevelopment area. The MRA is required to prepare and keep under review a Redevelopment Scheme for the area and to control developments in the area. For these purposes the Act gives the Authority powers to deal in land and other assets and to undertake works in the area. The MRA is also subject to the Financial Management Act 2006 and other relevant State legislation not specially provided for under the Act. It must also comply with all accountability and reporting requirements of the Act and State Government. Section 20(3) of the Act requires Ministerial approval for the Authority to enter into contracts with a value in excess of $1,000,000. There was one such contract in 2010/11: Land Development Contracts:

Civil works contract for the strata titling subdivision of Block I valued at $1.881 million.

The Midland redevelopment area is defined in Schedule 1 of the Act and covers an area of approximately 256 hectares in two parcels of land. The northern section, located in west Midland and known as Woodbridge, abuts the Swan River and covers the Ray Marshall Park and adjacent areas. The other land parcel is known as Midland Central and covers part of the town centre, the former Railway Workshops site and the former Midland Livestock Saleyards. During 2010/11 the MRA commenced proceedings so that the Redevelopment Area will be amended to remove Ray Marshall Park and adjacent areas from the MRA‟s planning control as part of the MRA‟s normalisation process.

Overview



Overview



Board

The Authority consists of five board members appointed by the Minister for Planning, two of whom are nominated by the City of Swan. This close connection with the City of Swan reflects a genuine partnership between the MRA and the City. The members represent a broad spectrum of knowledge and experience in fields appropriate to the activities of the MRA. Board members are Dr Fred Affleck (Chairperson), Mr Phil DiMasi (Deputy Chairperson), Dr Ann ten Seldam, Cr Jon Holmes and Cr Mel Congerton JP. A profile of each Board member is provided below: Dr Fred Affleck, Chairman

Dr Affleck is a transport expert with experience in industry and consulting in NSW, Victoria, South Australia and WA and in academia. He has been Chairman of the Midland Redevelopment Authority since 2004. He is also Chair of the Freight and Logistics Council of Western Australia and of the Planning and Transport Research Centre, and a Fellow of the Australian Institute of Company Directors and the Chartered Institute of Logistics and Transport. He was a Commissioner on the National Transport Commission from 2006 to 2008 and is Adjunct Professor at Curtin, Murdoch and Edith Cowan Universities. Mr Phil DiMasi

Mr DiMasi is the founder and Managing Director of Ventura Homes. He was born in Midland and completed his secondary education there before becoming involved in the building industry, in which he is a registered builder. Mr DiMasi has been a Board member of the executive council of the Housing Industry Association and is a member of the Master Builders Association and the Australian Institute of Management. Dr Ann ten Seldam

Dr ten Seldam has lived in Guildford since 1976 and has worked in the Midland and hills areas for many years. She is well known in the local community as a medical practitioner and as a Board member of the Swan City Youth Service. Dr ten Seldam has also held a part-time position with the Royal Flying Doctor Rural Female GP Service and with the Street Doctor Service.

Overview



Cr Jon Holmes

Cr Homes lives in Viveash. He was first elected to the Swan City Council's Midland Ward in 2003. Cr Holmes chairs the City of Swan's Bush Fire Advisory Committee and its Local Emergency Management Committee, and represents the council on the Eastern District Emergency Management Committee. He is also a member of the council's audit committee and the Local Government Reference Group of the Swan Catchment Council for Natural Resource Management and a Board member of Jobs Australia. Cr Mel Congerton JP

Cr Congerton chairs the MRA‟s Audit and Risk Management Committee. He was first elected to the City of Swan Council in 1999 and served as Deputy Mayor from 2005 to October 2009. Cr Congerton is also currently the Chairman of the Local Government Advisory Board, Chairman of the Eastern Region Business & Enterprise Arts Centre, Chairman of the City of Swan Audit Committee and Board member of several community groups based in the City of Swan. Cr Congerton is the Proprietor of Perfect Climate Control & MPC Consulting.

Organisational Structure

The Chief Executive Officer administers the day-to-day operations of the MRA and has prescribed delegated authority for particular management decisions. With the exception of the Chief Executive Officer, the Authority employs no staff directly; support is provided by staff seconded from the Department of Planning and by consultants. At 30 June 2011, eight staff members were on secondment to the MRA. The organisation supporting the MRA has been structured to reflect its functional programs. The current operating sections of the Authority are: Place Creation Place Development Business Services

A diagram of the Authority‟s current organisational structure is provided on the following page.

Overview



Organisation Chart - June 2011

The Chief Executive Officer is Kieran Kinsella. MRA staff for 2010/11:

Chief Finance Officer Jon Segui (to 13 May 2011)

Business Support Officer Nicole Carey

Administrative Assistant Gail Hayes

Director Planning Annelise Safstrom

Planning Manager Dominic Mitchell (to 29 October 2010)

Manager Planning Projects Colin Connor

Senior Planning Consultant Julie Mackay

Planning Officer Jocelyn Baister (from 11 April 2011)

Director Place Development Sandor Windnagel

Manager Communications and Fiona Weigall (to 3 December 2010) Business Development

Property Management Officer Martin Clark

MINISTER

BOARD

CHIEF EXECUTIVE OFFICER

DIRECTOR Business Services

DIRECTOR Place Creation

DIRECTOR Place Development

CONSULTANT SERVICES

Overview



Key consultants as at 30 June 2011 were:

Place Creation / Development

Heritage Heritage & Conservation Professionals Palassis Architects John Taylor Architect Philip Griffiths Architects Philip McAllister Architect Pty Ltd Hocking Planning and Architecture Environment Coffey Environments Pty Ltd Engineering Wood & Grieve Engineers Landscaping Urbis Pty Ltd Surveyors McMullen Nolan Surveyors Planning and Urban Design TPG Town Planning and Urban Design Business Services

Audit Services Internal Audit – Stanton Partners External Audit – Office of Auditor General

(BDO Kendalls) Valuation Services Landgate Valuation Services DTZ (WA) Pty Ltd Christie Whyte Moore Property Sales and Consulting Time Conti and DTZ (WA) Pty Ltd

Key Legislation Impacting on the MRA’s Activities

In the performance of its functions, the MRA complies with the following relevant legislation: Corporate Legislation

Auditor General Act 2006 Disability Services Act 1993 Equal Opportunity Act 1984 Financial Management Act 2006 Freedom of Information Act 1992 Industrial Relations Act 1979 Midland Redevelopment Act 1999 Minimum Conditions of Employment Act 1993 Occupational Safety and Health Act 1984 Public Interest Disclosure Act 2003

Overview



Public Sector Management Act 1994 Salaries and Allowances Act 1975 State Records Act 2000 State Superannuation Act 2000 State Supply Commission Act 1991 Statutory Corporations (Liability of Directors) Act 1996 Workers Compensation and Injury Management Act 1981 Land Development Legislation

Aboriginal Heritage Act 1972 Contaminated Sites Act 2003 Environmental Protection Act 1986 Heritage of Western Australia Act 1990 Land Administration Act 1997 Main Roads Act 1930 Planning and Development Act 2005 Swan and Canning Rivers Management Act 2006 Transfer of Land Act 1893 In its financial administration the MRA has complied with the requirements of the Financial Management Act 2006 and all other relevant legislation, and exercised controls which provide reasonable assurance that the receipt and expenditure of money and the acquisition and disposal of public property and incurring of liabilities have been in accordance with legislative provisions. At the date of signing, the MRA is not aware of any circumstances which would render the particulars included in this statement misleading or inaccurate.

Performance Management Framework

Outcome Based Management Framework

The MRA‟s goals are linked to Goal 2 in the WA Government‟s strategic planning framework, Jobs and Economic Development: To create conditions that foster a strong economy that delivers more jobs, more opportunities and greater wealth for all Western Australians. Agency Level Government Desired Outcome

The MRA operates under the following guiding objectives for the overall project to realise its vision for Midland: Attract people to Midland to live, work, learn and enjoy. Reactivation of the city

centre through mixed use development and inner-city living, coupled with a focus on cultural development and attraction of major health and education service providers continues to enhance Midland as a destination of choice.

Integrate development to maximise benefits for the city and the community. In

partnership with the City of Swan and other stakeholders the MRA strives to ensure its redevelopment work delivers quality places that will foster community wellbeing, in keeping with the broader vision for Midland.

Overview



Enhance environmental, social, heritage and cultural values in Midland and

around the redevelopment area. A focus on heritage conservation and interpretation, coupled with facilitation of cultural growth and diversity and use of renewable resources will ensure that the social and cultural values of the former Midland Railways Workshops are preserved and enhanced through dynamic activation of the site.

Invest responsibly for sustainable economic outcomes. The MRA is working

with its development partners to achieve economically sustainable and viable outcomes. These showcase the organisation‟s ability to manage a complex project responsibly whilst delivering on community expectations.

In all of the above objectives, the MRA has achieved a high level of success and stakeholder satisfaction.

Service

The MRA provides a series of activities as a single service. This includes activities to plan, undertake, promote, coordinate and activate the development and redevelopment of land in the defined redevelopment area. Shared Responsibilities with Other Agencies

The MRA did not share any responsibilities with other agencies in 2010/11.

Agency Performance



Chief Executive Officer’s Report on Operations

The year ending 30 June 2011 proved to be a quite frustrating year for the MRA with the Raffles Education Corp (REC) proposal for a private university failing to come to fruition. In late February 2011 the REC withdrew its application. As a result, nearly three years of negotiation and project development planning concluded. Faced with mounting debt, caused principally by the MRA withholding the land earmarked for the project, once again the Authority had to restructure its finances and return to its original plan to subdivide the former Midland Railway Workshops for sale.

The MRA has an ongoing collaboration with the Department of Health (DOH) to deliver the Midland Health Campus and during the course of the year a revised DOH Structure Plan was completed, site specific design guidelines were drafted and significant progress was achieved on related transport and infrastructure plans.

The MRA‟s push to establish state-of-the-art health facilities as part of the vision for The Workshops progressed with the commencement of the building works contract of $1.881 million for Block I let to Pindan to enable the strata titling of the lot to facilitate the co-construction of the Midland GP Super Clinic. The MRA is continuing to explore the potential to add value to the health services precinct.

After some delays the MRA has finally acquired the land on which the former Midland Livestock Saleyards operated. The MRA is seeking to identify the best way to remediate the site and bring it to market. There is strong interest from commercial and industrial developers to participate in the project.

Work also continued on the residential development of The Workshops, with the completion of two residential apartment developments creating 72 apartments. A further two apartment developments are approved and awaiting construction. Remediation effort during the year was focussed on The Workshops and included the completion of remediation and replacement of soils associated with the former Foundry building and the hospital site. The MRA also lodged its second Mandatory Audit Report with the Department of Environment and Conservation for the sectors of The Workshops adjacent to the former shunting yard. This is a critical component of the environmental clearances required to release land to market. It is anticipated that the third and final Mandatory Audit Report covering the balance of The Workshops site will be lodged prior to 31 December 2011. During the year the MRA completed works on the upgrading of the Peace Memorial Gardens and installed “The Ingot” public art piece on The Crescent and Keane Street roundabout, completing the city centre public art program. Financial outcomes for the MRA were again adversely affected by unanticipated delays in property sales due to the global financial crisis, and ultimately the failure of the REC project to proceed, with the result that the MRA needed to focus on priority areas and manage expenditure prudently.

Agency Performance



Actual Results versus Budget Targets

Financial Targets

Comparison of the 2010/11 financial targets, actual expenditure and variation are detailed below:

2010/11 $Target

(„000)

2010/11 $Actual

(„000)

Variation

(„000)

Total Revenue 41,370 1,847 (39,523)

Trading Profit/Loss (2,060) 841 (2,177)

Capital Works Expenditure 14,093 11,410 2,683

Total Borrowings (Debt Level) 49,701 64,032 (14,331)

Net Debt Level 49,071 62,986 (13,915)

Notes These target assumed:

Sale of land to Raffles Education Corporation finalised to allow commencement of services from 2011.

Key Performance Indicators

Three Key Result Areas (KRAs) combine to deliver the MRA‟s Place Making activities: Place Creation, Place Development and Business Services.

Effectiveness Indicator 2010/11 Target

2010/11 Actual

Variation

Land developed for sale 63% 54% (9%)

Improvement in value 5% 3% (2%)

Site investigated and extent of remediation completed

70% 63% (7%)

Subdivision of land for development (commercial)

84% 47% (37%)

Subdivision of land for development (residential)

100% 74% (26%)

Effectiveness Indicator 2010/11 Target

2010/11 Actual

Variation

Number of development applications over statutory limit: non-heritage

0 2 2

Number of development applications over statutory limit: heritage 0 0 0

Operating expense per dollar of land sales

0.10 1.93 1.83

Operating expense per dollar of capital works

0.40 0.35 0.05

Agency Performance



The key outcomes and achievements for each of the key result areas in 2010/11 are as follows:

Place Creation

Place Creation translates the vision for the redevelopment area into the detailed planning program that prepares and delivers land for development. It shapes the physical outcomes of the Midland redevelopment project and provides integrated, sustainable development solutions for each distinct parcel of land. Place Creation covers two business areas of Planning and Statutory Planning. Planning:

Key Planning outcomes in 2010/11 included: Ongoing collaboration with the Department of Health (DOH) to deliver the

Midland Health Campus (MHC) by achieving a revised DOH Structure Plan, the drafting of site specific design guidelines, and making significant progress on related transport and infrastructure plans.

Leadership of the creation of Midland City 2041 - a 30 year vision for Midland which incorporates an infrastructure framework developed in partnership with key agencies.

Commencing the planning process for the Midland Station Precinct working with the Public Transport Authority toward a new station and bus interchange at Cale Street adjacent to the MHC site.

Finalising a suite of heritage conservation plans for the major extant Workshops buildings and initiating an audit of all the heritage machinery and equipment.

Managing the preparation of final city centre major public art piece, “The Ingot”, installed in April 2011.

Statutory Planning:

An integral role of Place Creation is to fulfil the MRA‟s statutory planning responsibilities. In 2010/11 this has been achieved by:

Managing the MRA‟s development control functions to ensure timely and accurate assessment and processing of development applications.

Monitoring and controlling the development and delivery of subdivision plans to facilitate the MRA‟s land release program, particularly towards the release of titles for components of The Workshops.

Reviewing planning policies and seeking amendments as required.

Place Development

This directorate has a broad range of responsibilities in the four business areas of Place Development; Place Management; Communication and Public Relations; and Economic and Business Development.

Agency Performance



Place Development:

Place Development implements the detailed plans for the land being redeveloped and prepares land for market. This includes demolition, environmental remediation, installation of infrastructure, subdivision works and development control required to prepare and develop the land for sale. Key Place Development outcomes in 2010/11 included: Completion of the soil remediation of The Workshops subdivision.

Lodgement and endorsement of the MRA‟s second Mandatory Audit Report with the Department of Environment and Conservation. This is a critical component of the environmental clearances required to release land to market.

Commencement of Building Works contract of $1.881 million for Block I let to Pindan to enable the strata titling of the lot to facilitate the co-construction of the Midland GP Super Clinic.

Installation of “The Ingot” public art piece in The Crescent and Keane Street roundabout completing the city centre public art program.

Completion of upgrade works to the Peace Statue and Memorial Garden allowing greater public access to the garden.

Completion of the Foundation Housing mixed-use development and Diploma residential development providing the first 72 apartments to The Workshops site.

Finalisation of the former Midland Livestock Saleyards land transfer to the MRA and completion of revised concept plan and business case.

Place Management

Place Management involves managing the MRA‟s assets and developing initiatives to activate the MRA‟s buildings and public spaces to make the city a vibrant, interesting and welcoming place. Key Place Management outcomes in 2010/11 included: Continuation of the „normalisation‟ process for areas of Public Open Space,

which commenced in July 2010.

Continuation of the preservation of the MRA‟s assets through proactive maintenance programs, including the preparation and implementation of an asset maintenance program.

Management of the MRA‟s properties, including restoration works, to ensure that they remain ready and available for active re-use including temporarily leasing space to a range of local organisations and government agencies.

Maintenance of the MRA‟s public artworks.

Management of security and access to The Workshops.

Agency Performance



Communications and Public Relations

This component of Place Development focuses on developing and implementing communication strategies to position the MRA as an innovative and successful government land developer, leading the urban renewal program responsible for transforming Midland and strengthening the economy of the broader Swan region. Key Communications and Public Relations outcomes in 2010/11 included: Ongoing liaison with the media, stakeholders and interested parties including

preparation of regular media releases, newsletter pieces and publication articles, resulting in increased public relations and media exposure for the MRA‟s work.

Publication of “Midland Redevelopment Authority – Celebrating 10 Years” to commemorate our 10 year anniversary.

Continuation of a monthly newspaper column in a local newspaper reaching the local and broader community.

Production of corporate documents on time and in line with corporate and external requirements.

Preparation of briefing material and project related stakeholder liaison material.

Economic and Business Development

The goal of Economic and Business Development is to attract new economic and enterprise initiatives, enhance cultural diversity and make Midland a vibrant, interesting and welcoming place. Work in this business area is predominantly undertaken in partnership with the City of Swan and other stakeholders with an interest in growing the local economy and building community wellbeing. Key Economic and Business Development outcomes in 2010/11 included: Working with Raffles Education Corporation to facilitate the progress of

attracting a major university campus to The Workshops.

Continuation of the development of a creative industries precinct at The Workshops via a partnership with FORM to operate and grow the Midland Atelier.

Ongoing commitment with Eastern Metropolitan Regional Council, City of Swan and Swan Chamber of Commerce to ensure that Midland is job and opportunity ready for the arrival of major institutions including the Midland Health Campus and a potential university college.

Business Services

Business Services comprises three key functions: Corporate Support; Commercial Operations; and Financial Operations. Business Services provides commercial, administrative and financial support that meets the needs of the MRA's internal and external customers.

Agency Performance



The Business Services directorate focus is to manage the commercial and corporate operations of the MRA including procurement, land acquisition, sales of developed land and commercial leasing. The MRA‟s corporate functions include accounting, human resources and corporate and statutory administration. The focus is to ensure that commercial opportunities are recognised and the benefit to the MRA maximised. Corporate Support

Key Corporate Support outcomes in 2010/11 included: Ensuring that the day-to-day operations of the MRA were adequately resourced

and bedding down a new organisational structure.

Providing quality advice and meeting key external reporting information and timeframe requirements of agencies such as Department of Treasury and Finance and Office of the Auditor General.

Preparation and provision of information necessary to allow an adequate assessment of the MRA‟s performance during the year, including the Annual Report.

Development and maintenance of corporate governance policies and procedures including the updating of Records Management policies and updating of the Reconciliation Plan and Disability Access and Inclusion Plan.

Commercial Operations

Key Commercial Operations outcomes in 2010/11 included: Provision of necessary information to facilitate the transfer of the former

Midland Livestock Saleyards to the MRA.

Valuation of land parcels within The Workshops to progress negotiations with Health Integra Pty Ltd for sale of a portion of Block I to accommodate the GP Super Clinic.

Financial Operations:

Key Financial Operations outcomes in 2010/11 included: Managing the cash-flow restrictions by obtaining approval for an increase in

borrowing limits to $65.98 million for the 2010/11 year.

Securing a peak borrowing limit of $70.98 million for 2010/11 to enable the MRA to continue to operate following the withdrawal of interest by the Raffles Education Corporation in purchasing much of The Workshops site.

Management of the net debt levels to minimise borrowing costs.

Preparation, adoption and management of the 2010/11 operating budget and participation in mid-year budget review.

Meeting all statutory financial reporting requirements throughout the year.

Significant Issues Impacting the MRA



Current Issues and Trends

Contaminated Sites

The Contaminated Sites Act 2003 came into effect on 1 December 2006. This Act requires government agencies to report any known and suspected contaminated sites to the Department of Environment and Conservation (DEC). DEC is then required to classify these sites on the basis of the risk to human health, the environment and environmental values. Where sites are classified as “contaminated - remediation required” or “possibly contaminated - investigation required”, agencies may need to recognise a liability for investigation or remediation expenses. In 2010/11 the MRA lodged its second Mandatory Auditors Report with DEC, which is a requirement of the Contaminated Sites Act 2003. The process of meeting the Contaminated Sites Act 2003 has had both a time and resource impact on the MRA as it also has had to meet Ministerial Conditions imposed on it by the previous environmental approval process. Land Market Trends

2010/11 saw the Western Australian economy experience a very patchy recovery from the impact of the global financial crisis. This inconsistent economic growth and indifferent confidence levels had a flow on effect for the property market generally. Developers are continuing to find it hard to put adequate financial arrangements in place as bank lending conditions remain rigid. There is little evidence that the Midland property market will improve substantially in the coming year. Our land marketing may have to be augmented with flexible financing arrangements with the Authority taking equity positions in some strategic developments. Site Specific Uncertainty

The uncertainty surrounding the proposed university campus at The Workshops for much of the year led to minimal land sales, with both financial and operational implications for the MRA. The decision to preserve land to facilitate the university college opportunity meant limited land was available to release to market, with cash-flow consequences. This uncertainty also temporarily stalled final subdivision planning and suspended some site works, requiring the MRA to focus on priority areas and manage expenditure prudently.

Significant Issues Impacting the MRA



Affordability

As part of its charter and aim to provide housing diversity within Midland, the MRA aims to deliver affordable land to market. This includes the provision of land for one and two bedroom apartments and other „affordable living‟ land configurations. However broader trends such as Western Australia‟s high construction costs per square metre (the highest in Australia), continue to adversely impact on the MRA‟s ability to deliver affordable housing. Proximity of the MRA‟s precincts to public transport and the transit orientated development nature of the project do however generate affordable living outcomes from the project. Continued focus on the costs of transport, and „urban sprawl‟ are expected to see increasing market recognition of the affordable living opportunities Midland offers. Metropolitan Redevelopment Authority Bill 2011

On 23 June 2011, the Minister for Planning introduced legislation into State Parliament to create the Metropolitan Redevelopment Authority. The Metropolitan Redevelopment Authority Bill 2011 will allow a new amalgamated authority to replace the existing redevelopment authorities in Armadale, East Perth, Midland and Subiaco. The new Authority is currently expected to commence on 1 January 2012; and this is therefore anticipated to be the final annual report for the MRA.

Disclosures and Legal Compliance



Certification of the Financial Statements



The accompanying financial statements of the Midland Redevelopment Authority have been prepared in compliance with the provisions of the Financial Management Act 2006 from proper accounts and records to present fairly the financial transactions for the financial year ending 30 June 2011 and the financial position as at 30 June 2011. At the date of signing we are not aware of any circumstance which would render the particulars included in the financial statements misleading or inaccurate.


Phil DiMasi DEPUTY CHAIRPERSON

Kieran Kinsella CHIEF FINANCE OFFICER 9 September 2011

Financial Statements



Midland Redevelopment Authority

Financial Statements

30 June 2011

Statement of Comprehensive Income



Statement of Financial Position

As at 30 June 2011


Statement of Changes in Equity



Statement of Cash Flows



Notes to the Financial Statements



Certification of the Key Performance Indicators



We hereby certify that the key performance indicators are based on proper records, are relevant and appropriate for assisting users to assess the Midland Redevelopment Authority‟s performance, and fairly represent the performance of the Midland Redevelopment Authority for the financial year ended 30 June 2011.


Phil DiMasi DEPUTY CHAIRPERSON 9 September 2011




Detailed Information in Support of Key Performance Indicators

The Midland Redevelopment Authority (MRA) was established under the Midland Redevelopment Act 1999 (the Act) and is responsible to the Minister for Planning; Culture and the Arts; Science and Innovation. The MRA commenced operations on 1 January 2000. The MRA is both a planning agency and a land development agency preparing and selling land for development. As provided by the Act, the functions of the MRA are to plan, undertake, promote and coordinate the development and redevelopment of land in the defined redevelopment area. The MRA is required to prepare and keep under review a Redevelopment Scheme for the area and to control developments in the area. For these purposes, the Act gives the MRA powers to deal in land and other assets and to undertake works in the area.

Government Goal

To create conditions that foster a strong economy that delivers more jobs, more opportunities and greater wealth for all Western Australians.

Agency Level Government Desired Outcomes

The MRA operates under the following guiding objectives for the overall project to realise its vision for Midland:

Attract people to Midland to live, work, learn and enjoy.

Integrate development to maximise benefits for the city and the community.

Enhance environmental, social, heritage and cultural values in Midland and around the redevelopment area.

Invest responsibly for sustainable economic outcomes.

Service

The MRA provides a series of activities as a single service. This includes activities to plan, undertake, promote, coordinate and activate the development and redevelopment of land in the defined redevelopment area. Land Areas

Unless otherwise indicated, the MRA has included the Midland Livestock Saleyards in its indicators. On 8 June 2010, the Government decided to grant the Saleyards to the MRA for a nominal consideration.




Outcomes

1. Attract People to Midland to Live, Work, Learn and Enjoy

The MRA has reviewed this outcome during 2010/11 as part of its Strategic Planning Process. The outcome leads the MRA to prioritise projects which promote increases in population and / or employment generation that will assist to revitalise Midland. The Midland Place Plan 2010-2013 developed by the City of Swan to guide Midland‟s future development, estimates that population growth of 70.7% will occur from 2006-2031, delivering a residential population of 17,352 by 2031. One of the major inputs into the facilitation of population growth is provision of sufficient land to support a growing residential population. The effectiveness indicator used by the MRA illustrates total land available for development and the proportion of this land improved and ready for development to date. Total land available figures used by the MRA have remained constant in this Annual Report. During 2010/11, the MRA increased the total land available by 2,045m2 due to an increase in commercial land. 2,712m2 of residential land was also progressed to „development in progress‟ due to Tuohy Gardens. Developed land remained the same as the 2009/10 figure of 312,075m2. Effectiveness Indicator: Land Developed for Sale

Unimproved

Land (m2)

Development In Progress

(m2)

Development Complete

(m2)

Total Land Available

(m2) Commercial 188,448 71,273 251,818 511,539

Residential - 2,712 60,257 62,969

Total 188,448 73,985 312,075 574,508

2007/08 Actual

2008/09 Actual

2009/10 Actual

2010/11 Actual

2010/11 Target

2010/11 Variance

Commercial 50% 46% 49% 49% 59% -10%

Residential 51% 58% 96% 96% 96% -

Complete 50% 57% 55% 54% 63% -9%

The 10% shortfall in commercial land developed for sale in 2010/11, relates to land areas within Sectors 10C and 10D which are under progress rather than completed. These are scheduled for completion in 2011/12.




2. Integrate Development to Maximise Benefits for the City and the Community

Over the past five years land values in Midland have increased by 4.3%. Similarly over the past ten year period land values in Midland have increased by 13.8%. In 2010 the median house price in Midland was $350,000; by 2011 the median price had decreased to $345,000. From 2010 to 2011 median house prices in Midland had decreased by approximately $5,000 representing a 1.4% decrease. The effectiveness indicator used by the MRA to measure outcome two is the improved value of MRA land holdings. Effectiveness Indicator: Improvement in Value of MRA Land Holdings

Subdivision (2006/07)

Estimate rate/m2 2006/07

Actual rate/m2 2006/07

% Change

% Target

+/-

% Variance

Hospital Site 140 140 0% 5% 0%

Woodbridge Lakes Estate Stage 2

597 634 +6% 5% 1%

Woodbridge Lakes Estate Sector 12

412 491 +19% 5% 14%

City Centre Subdivision 453 507 +12% 5% 7%

Average Variance +9% 5% 4%




% Change

% Target

+/-

% Variance


670 701 +5% 5% 0%


567 664 +17% 5% 12%

Sector 14 Lot 8030 536 536 0% 5% 0%

City Centre Subdivision 957 857 (10%) 5% (5%)

Average Variance +3% 5% (2%)




% Change

% Target

+/-

% Variance

Woodbridge Lakes L656 933 831 (11%) 5% (6%)

Woodbridge Lakes L703-705 711 515 (28%) 5% (23%)

City Centre Subdivision L431 1,017 925 (9%) 5% (4%)

Average Variance (16%) 5% (11%)




% Change

% Target

+/-

% Variance

Woodbridge Lakes L659 859 859 0% 5% 0%

Woodbridge Lakes L678,L681,L682

963 979 2% 5% 0%

Woodbridge Lakes L602 384 384 0% 5% 0%

City Centre Subdivision L429 1001 909 (9%) 5% (4%)

Average Variance (2%) 5% 0%




3. Enhance Environmental, Social, Heritage and Cultural Values in Midland

and Around the Redevelopment Area. The MRA is committed to transforming brown-field sites into useful land parcels that will enhance the social, heritage and cultural fabric of Midland. The MRA‟s vision is to provide valuable urban space for commercial, residential and community use that complement the Midland urban landscape. This indicator shows how the MRA is progressing transformation of degraded, contaminated land into usable spaces that attract people and activation. Remediation of the Helena East precinct of The Workshops has reached practical completion. Significant progress towards obtaining environmental clearances has been made. The MRA has completed remediation of 545,695m2 of land in the redevelopment area. This represents 63% of the total area investigated which is slightly behind the target of 70%. Effectiveness Indicator: Sites Investigated and Extent of Remediation Completed

30 June 2011

Total area to be investigated 870,575 m2

Total area under investigation 272,780 m2

Total area with remediation complete 545,695 m2

Remaining area to be investigated 52,100 m2

2004/05 Actual completion 33%







2010/11 Target completion 70%

2010/11 Variance (7%)

The 7% shortfall in remediation completed relates to contaminated land that has not yet been fully remediated. The MRA is expecting to receive clearances for a significant portion of land during 2011/12.




% Change

% Target

+/-

% Variance

The Sidings, Lot 499 450 450 0 5% 0%

The Sidings, Lot 669 273 296 +8% 5% 3%

Tuohy Gardens, Lot 421 909 903 0 5% 0

Average Variance 3% 5% -2%




4. Invest Responsibly for Sustainable Economic Outcomes

The MRA aims to grow and diversify the economic base of the area by increasing the availability and quality of residential and commercial land. The preparation of residential and commercial subdivisions and anticipated land sales are expected to stimulate population growth, improve employment opportunities and contribute to overall economic growth in the Midland area. Effectiveness Indicator: Subdivision of Land for Development

During the year the MRA created three commercial lots within the workshop subdivision.

Commercial Residential

Total lots planned to be created 43 130

Number of lots with approved deposited plan 17 96

Number of lots outstanding 26 34

2004/05 Complete 16% 31%

2005/06 Complete 39% 70%

2006/07 Complete 29% 72%

2007/08 Complete 28% 72%

2008/09 Complete 29% 73%

2009/10 Complete 40% 74%

2010/11 Complete 47% 74%

2010/11 Target 84% 100%

2010/11 Variance (37%) (26%)

The 37% shortfall for the target of 84% commercial subdivision of land for development is due to 20 out of the targeted 36 lots being subdivided by the end of 2010/11, the shortfall mainly relates to sector 10 and a delay in the deposited plans being issued. The 26% shortfall for the target of 100% residential subdivision of land for development is due to 96 out of the targeted 130 lots being subdivided by the end of 2010/11, the shortfall relates to sector 10B.

Efficiency Indicator: Planning Application Assessments

The MRA is responsible for statutory planning in the redevelopment area. It aims to provide an efficient development control function to ensure timely and accurate assessment and process of development applications. Under the Midland Redevelopment Scheme 2005 the MRA must refer development applications for heritage buildings or for land within a gazetted heritage curtilage to the Heritage Council of Western Australia (HCWA). As there is no statutory or mandatory response time in which the application needs to be considered by the HCWA, it was important for the MRA to establish a separate category to measure the assessment of these applications. This is important given that a large portion of the remaining land and buildings yet to be developed are affected by heritage considerations.




In 2010/11 there were five development applications requiring assessment and referral to the Heritage Council of Western Australia. Two of these are still under consideration. Applications that took longer to complete than the 60-day target did so for several reasons including: incomplete information provided by the proponent slow return of referrals to aid assessment the increasing complexity of development applications as the area matures and

the adaptive re-use of heritage buildings increases. Non-heritage Assessments

Year Number of applications assessed

Number of applications assessed over statutory limit

(60 days)

Target number of assessments over the statutory requirement

2006/07 72 20 0

2007/08 44 19 0

2008/09 16 4 0

2009/10 23 7 0

2010/11 24 2 0

Heritage Assessments Year Number of

applications assessed

Number of applications assessed over statutory limit

(120 days)

Target number of assessments over the statutory requirement

2006/07 5 0 0

2007/08 3 0 0

2008/09 0 0 0

2009/10 4 2 0

2010/11 3 0 0

Efficiency Indicator: Comparison of Administrative Operating Expenses Per Dollar of Land Sales and Capital Works During the Year

This indicator relates inputs to outputs to quantify how well MRA uses its resources. The indicator provides a ratio of administrative operating expenses per dollar of gross land sales made during the year; and the dollar of operating expenses per dollar of capital works conducted during the year. The lower the fraction the better the MRA is performing.

Operating Costs per $ of:

2007/08 Actual

2008/09 Actual

2009/10 Actual

2010/11 Actual

2010/11 Target

Land sales 0.34 1.74 1.18 1.95 0.10

Capital Works 0.28 0.23 0.28 0.35 0.40

Land sales were significantly less during the financial year, and as a result, the operating cost per dollar of land sales increased. The MRA experienced a small variation with its capital works expenditure this financial year as the organisation was able to achieve better than anticipated operating costs for every dollar of capital works spent. This meant that the MRA performed better than initially forecast.

Other Financial Disclosures



Ministerial Directives No Ministerial directives were received during the financial year.


Pricing Policies of Services Provided

Land Sales Pricing

The MRA prices its land based on consideration of valuations provided by the Valuation Services Division of Landgate and, where feasible, up to two contracted private valuers. The pricing benchmark is determined by a resolution at the Board meeting immediately before the land sale. All land is sold by one of the following methods:

Public auction; Public tender advertised in the local and State-wide newspapers and industry-

specific publications; and Private treaty. Community Service Obligations (CSO)

The MRA was previously provided with a CSO for the security and high order maintenance of the Midland Railway Workshops, given The Workshops buildings‟ significant heritage value and the need to secure heritage items remaining on the site. In 2010/11 the MRA received no CSO and the cost of providing security for the MRA‟s assets was sourced internally from sales revenue. Dividend Policy

The 1999 State Cabinet decision to establish the MRA included a review of its Financial Feasibility Plan and determined that it was not to be considered an agency subject to the Tax Equivalent Regime. The MRA is not therefore required to provide a dividend to Government. Capital Works

The MRA has made continuing progress on the development of Midland. Capital projects currently in progress are:

Capital Projects Currently in Progress

Estimated Total Cost of the

Project $‟000

Estimated Cost to Complete at 30

June 2011 $‟000

Block 1 Strata and Subdivision 1,881 1,765




Completed Projects Total cost of the project

$’000

Helena East Forward Works Stage 1&2 12,387

The Workshops Sector 10B 4,523

The Workshops Sector 10A 4,377

Helena East Remediation Stage 3&4 13,047

The Workshops Sector 10D 2,777

Employment and Industrial Relations

Staff Profile

2009/10 2010/11

Full-time permanent 9 7

Full-time contract 0 1

Part-time measured on a FTE basis 2 1

On secondment* 0 0

11 9

* On secondment from a Government Agency other than the Department of Planning.

Staff Development

The MRA is committed to the development of its employees to build a highly skilled, professional and fair workforce able to adapt to changing business technology and environment. During 2010/11 one employee received an Attraction and Retention Benefit, and Place Creation staff benefited from the Specified Calling Allowance. Attracting and retaining staff and corporate knowledge continues to be a challenge. During the year in review MRA employees received more than 213 hours of in-house and external training. Workers Compensation

There were no workers compensation claims in 2010/11.

Governance Disclosures

Contracts with Senior Officers

At the date of reporting, other than normal contracts of employment of service no senior officers, or firms of which senior officers are members, or entities in which senior officers have substantial interest, had any interests in existing or proposed contracts with the MRA and senior officers.

Insurance premiums paid to indemnify members of the Board

An insurance policy has been taken out to indemnify members of the Board against any liability incurred under sections 13 or 14 of the Statutory Corporations (Liability of Directors) Act 1996. The amount of the insurance premium paid for 2010/11 was $11,479.28 (excluding GST).




Other Legal Requirements

Advertising

In accordance with section 175ZE of the Electoral Act 1907, the MRA incurred the following expenditure in advertising, market research, polling, direct mail and media advertising: 1. Total expenditure for 2010/11 was $63,833 (ex GST).

2. Expenditure was incurred in the following areas:

Advertising Expenditure Dollars Spent

Advertising agencies Adcorp Marketing Communications Time Conti (selling agent) DTZ (WA) Pty Ltd (selling agent)

$2,511 $3,935

$17,640

Market research organisations Nil

Polling organisations Nil

Direct mail organisations Nil

Media advertising organisations Marketforce Retail Optimum Media Decisions (WA) Ltd

$829

$38,918

Disability Access and Inclusion Plan

The MRA Disability Access and Inclusion Plan (DAIP) was lodged with the Disability Services Commission in February 2007. The MRA‟s initiatives to address each of the six desired outcomes are: 1. People with disabilities have the same opportunities as other people to access

the services of, and any events organised by, a public authority.

All policies, guidelines and practices that govern the operation of MRA facilities and services are consistent with the policy on access.

Public events organised by the MRA, such as public land auctions and

Ministerial events, are accessible to people with disabilities. 2. People with disabilities have the same opportunities as other people to access

the buildings and other facilities of a public authority.

The MRA‟s administration building has disabled parking, toilets and full access throughout the lower floor. The Midland Railway Workshop site has disabled access to the public Workers‟ Wall area. However, it must be recognised that a significant number of MRA assets are listed as heritage buildings with heritage conservation restrictions that preclude adapting them for disabled access.

The Woodbridge Lakes and Juniper Gardens land developments have

access ramps and pathways throughout the public areas.




3. People with disabilities receive information from a public authority in a format

that will enable them to access the information as readily as other people are able to access it.

MRA information is available in person, via telephone, website and in hard

copy which can be provided in a variety of formats on request. All information is available in a clear, concise and easy to understand language.

MRA provides access to Auslan interpreters on request.

4. People with disabilities receive the same level and quality of service from the

staff of a public authority as other people receive from the staff of that public authority.

MRA staff members with key client and public roles are trained to ensure

that, in relation to service provision, they are aware of the key access needs of people with disabilities, their families and carers who use MRA facilities and services.

5. People with disabilities have the same opportunities as other people to make

complaints to a public authority.

Complaints can be made to the MRA by various means. These include in person, in writing, by telephone through the MRA Community Feedback Line, and electronically via a feedback form available on the MRA website.

6. People with disabilities have the same opportunities as other people to

participate in any public consultation by a public authority.

Issues for public comment are advertised via local newspaper articles, media releases on the MRA website and letters to homeowners surrounding the relevant land area. Responses can be made by telephone, letter, e-mail, website feedback form or in person. For large projects seeking public comment, open community forums are held for all interested parties to attend and participate in a group consultation. These processes are conducted in venues with disabled access.

Progress on the DAIP was reported to the Disability Services Commission on 23 July 2010. The DAIP can be accessed through the MRA website.




Compliance with Public Sector Standards and Ethical Codes (Public Sector Management Act 1994 Section 31(1)) 1. In the administration of the Midland Redevelopment Authority, I have complied

with the Public Sector Standards in Human Resource Management, the Western Australian Public Sector Code of Ethics and the MRA‟s Code of Conduct.

2. I have put in place procedures designed to ensure such compliance and

conducted appropriate internal checks to satisfy myself that the statement made in 1 is correct.

3. The applications made for breach of standards review and the corresponding

outcomes for the reporting period are:

Number lodged: Nil Number of breaches found, including details of multiple breaches per application: Nil Number still under review: Nil

Kieran Kinsella CHIEF EXECUTIVE OFFICER 9 September 2011




Recordkeeping Plans

In accordance with State Records Commission (SRC) requirements, the first official MRA Recordkeeping Plan (RKP) was created and approved by the SRC in November 2004. An interim revision of the RKP was conducted in 2006 alongside the creation of new recordkeeping policies, procedures and supporting documentation. Under the State Records Act 2000, a RKP is to be reviewed after a five year period. At its meeting held on 18 June 2010, the SRC approved the MRA‟s new RKP for a further five year period, to 2015. It was found the new RKP demonstrated progress towards better practice recordkeeping and compliance with the minimum requirements of SRC Standard 2: Recordkeeping Plans and SRC Standard 6: Outsourcing. SRC acknowledged that the MRA RKP indicates a strong commitment to addressing certain matters within specific timeframes. The MRA‟s official recordkeeping documentation comprises: Recordkeeping Plan Records Management Policy and Procedures Manual Recordkeeping Induction Form Recordkeeping Feedback Form Disaster Management Plan-Vital Records Emergency Control Organisational Plan Retention and Disposal Schedule In January 2011 an interim review of the new RKP and supporting documentation was conducted to reflect minor in-house amendments, of which all staff members were advised through an internal training program. The MRA also conducts recordkeeping training for new staff as part of an induction program that addresses employees‟ roles and responsibilities in complying with the recordkeeping system. One new employee was inducted during 2010/11. The effectiveness of the training program is reviewed annually, with no changes required for 2010/11.

Annual Estimates

In 2011/12 the MRA will invest $7.002 million in capital works to facilitate re-use of The Workshops site. Works will primarily focus on forward works for Block l which will allow the building to be strata titled and enable the allocation of the eastern portion to the Midland GP Super Clinic project. These works will facilitate pedestrian and road access and allow the site to be strata titled and subdivided – all of which are critical steps towards completing the new Midland GP Super Clinic. Funding for the overall capital program remains tight, and expenditure will be measured. Works on the newly acquired former Midland Livestock Saleyards site (Midland Enterprise Park) will require additional funding to commence. A submission for additional resources will be made as part of the mid-year budget review process.




The major projects to be undertaken with the $7.002 million capital works allocation include:

Works Programmed $‟000

Helena East Forward Works 1,272

Sector 10 Subdivisional Works (Block One) 1,941

Project Consultant Fees 642

Capitalised Borrowing Costs 3,147

TOTAL* 7,002 * Includes GST

Government Policy Requirements

Occupational Safety and Health and Injury Management

The MRA is committed to ensuring occupational safety and health (OS&H) and injury management in the workplace. An Emergency Control Organisation Plan outlining emergency control organisation and safety preparations to be complied with by management and staff at the MRA office was originally created in 2004, amended in November 2008 and officially revised in June 2010. The plan complies with requirements prescribed in the Australian Standard AS 3745-2002 Emergency Control Organisation and Procedures for Buildings, Structures and Workplaces. All new staff members are inducted on OS&H matters when commencing with the MRA and are encouraged to voice any concerns to MRA‟s Fire/First Aid Wardens or management. One new employee was inducted in 2010/11. OS&H issues are discussed at monthly senior management meetings and all staff meetings. The MRA also complies with the injury management requirements of the Workers’ Compensation and Injury Management Act 1981.

Performance for 2010/11:

Indicator Target 2010/11

Number of fatalities Zero (0)

Lost time injury/diseases (LTI/D) incidence rate Zero (0)

Lost time injury severity rate Zero (0)

Percentage of workers returned to work within 28 weeks

Zero (0)

Percentage of managers trained in occupational safety, health and injury management responsibilities

0%

Freedom of Information (FOI)

The Freedom of Information Act 1992 (FOI Act) gives the public the right to apply for access to documents held by State and Local Government agencies, including those of the MRA. The MRA‟s appointed FOI Coordinator is the Business Support Officer; the initial recipient of requests for information under the FOI Act.




In September 2010 the Office of the Information Commissioner approved the MRA‟s revised FOI Information Statement as compliant with the provisions of the FOI Act in describing the operation of FOI in the MRA. Following this approval a new Freedom of Information page was created on the MRA‟s website, containing the MRA‟s FOI Information Statement, Procedures and Forms and contact information. The MRA aims to make information available promptly, for the least possible cost, and wherever possible documents will be provided outside the FOI process. There were no FOI requests for 2010/11.

Publications

The principal publications of the Authority during the year were: Midland Redevelopment Authority Annual Report 2009/10 Midland Redevelopment Authority - Celebrating 10 Years All publications can be downloaded from the Authority‟s website www.mra.wa.gov.au

http://www.mra.wa.gov.au/

annual report for the year ended 30 june 2011 · john day bsc bdsc mla minister for planning;...

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