section 48 prudential report salisbury community hub · the project scope involves the design and...

City of Salisbury Section 48 Prudential Report Salisbury Community Hub July 2017

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Table of Contents EXECUTIVE SUMMARY ................................................................................................................. I 1. INTRODUCTION ................................................................................................................... 1

1.1 Background ................................................................................................................. 1 1.2 Rationale ..................................................................................................................... 4 1.3 The Project .................................................................................................................. 5 1.4 Legal Framework and Prudential Issues ................................................................... 6

2. RELATIONSHIP WITH RELEVANT STRATEGIC MANAGEMENT PLANS ....................... 10 2.1 Relevant Strategic Management Plans.................................................................... 10 2.2 Salisbury City Plan 2030 .......................................................................................... 11 2.3 Annual Plan 2017/18 ................................................................................................. 12 2.4 Long Term Financial Plan ........................................................................................ 13 2.5 Asset Management Plans ......................................................................................... 13 2.6 Guiding Principles for Community Hubs ................................................................ 14 2.7 Regional Objectives.................................................................................................. 14 2.8 South Australian State Government Plans ............................................................. 14 2.9 National Objectives .................................................................................................. 16

3. OBJECTIVES OF THE DEVELOPMENT PLAN .................................................................. 17 3.1 Development Approval ............................................................................................. 17 3.2 Development Zone .................................................................................................... 17 3.3 Approving Authority ................................................................................................. 18

4. ECONOMIC DEVELOPMENT ............................................................................................. 20 4.1 Contribution to Economic Development ................................................................. 20 4.2 Economic Impact of Construction Activity ............................................................. 21 4.3 Overall Economic Impact of Salisbury Community Hub Project ........................... 22 4.4 Impact on Business in the Proximity ...................................................................... 22 4.5 Fair Competition ....................................................................................................... 22

5. COMMUNITY CONSULTATION .......................................................................................... 24 5.1 Level of Consultation ............................................................................................... 24 5.2 Community influence and contribution ................................................................... 26

6. FINANCIAL ASSESSMENT ................................................................................................ 27 6.1 Revenue Production, Revenue Projections and Potential Financial Risks .......... 27 6.2 Recurrent and Whole of Life Costs, Financial Arrangements ............................... 28 6.3 Financial Viability ..................................................................................................... 30

7. PROJECT RISK AND MITIGATION STRATEGIES ............................................................ 31 7.1 Risk Management ..................................................................................................... 31 7.2 Risk Mitigation .......................................................................................................... 33

8. PROJECT DELIVERY ......................................................................................................... 34 8.1 Delivery Mechanism ................................................................................................. 34 8.3 Procurement Implications ........................................................................................ 36

9. CONCLUSION ..................................................................................................................... 39 ATTACHMENT ONE: LOCAL GOVERNMENT ACT, 1999 – SECTION 48 ................................ 41 ATTACHMENT TWO: RLB PROJECT COST ESTIMATES ........................................................ 44

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EXECUTIVE SUMMARY

The Salisbury Community Hub Project involves the construction of a new building within the Salisbury City Centre to serve as the customer and community services centre for the City of Salisbury, incorporating civic spaces, council chambers, foyer/gallery, community accessible meeting areas and a learning and information centre (modern interpretation of a library) along with a functional office space for the Council’s administration. The total budget for the Project set by Council is $43.82 million.

The project scope involves the design and construction of the new building, upgrades to the adjacent Civic Square and adjacent streetscapes and disposal of the existing Civic Centre and Len Beadell Library.

The following report has been prepared in accordance with the requirements of Section 48 of the Local Government Act 1999 which requires a Council to consider a report addressing the prudential issues set out in subsection 2 of the Act before engaging in a project where the expected capital cost over the ensuing five years is likely to exceed $4.628 million (indexed).

Relationship with Strategic Management Plans

The Salisbury Community Hub Project is considered to be strongly aligned with the City of Salisbury strategic direction and the desired outcomes as outlined within the Salisbury City Plan 2030 by advancing three of the four key directions identified in the Plan. The Project would also advance a number of the State priorities and targets, particularly in relation to the State Strategic Plan’s “Our Community” and “Our Prosperity” objectives and the Regional Northern Economic Plan and endorsed Salisbury City Centre Renewal Strategy.

The Salisbury 2017/2018 Long Term Financial Plan incorporates adequate provisions of for the construction of the Salisbury Community Hub Project. We note that if the Project proceeds as planned, the Salisbury Buildings Asset Management Plan will need to be substantially amended to reflect decommissioning and disposal of the existing Civic Centre and Len Beadell Library and the addition of the Salisbury Community Hub.

Objectives of the Development Plan

The Salisbury City Centre Community Hub Project involves works which are defined as “development” under the Development Act 1993. At this stage of the Project no Development Approval has been sought.

We note that the Design Team will be responsible for securing Development Plan Consent through the Development Assessment Commission. Post novation, the Design Team and Design & Construct Contractor will be responsible for receiving Building Rules Consent and Development Approval.

The proposed land use and development is consistent with the Objectives of the City of Salisbury Development Plan for the Salisbury City Centre Urban Core Zone.

Contribution to Economic Development

Based on economic modelling commissioned by the City of Salisbury, should Council proceed with the Project, it is expected to have a positive economic impact in the region, generating an increase in economic output of up to $65.523 million from the $32.739 million of construction works expenditure associated with the base build, fit out, ICT and fixtures, fittings and equipment. The Project is estimated to have an impact of up to 150 jobs through direct, industrial and consumption effects.

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During the construction phase of the Project, businesses in the proximity may be impacted by the construction works limiting access to the Project area and surrounds. Accordingly, Salisbury should ensure that its Project Management Plan addresses the need to minimise the impact on businesses in the area during construction.

Following construction, the improved amenity in the area is expected to result in additional custom and trade for a wide range of businesses in the vicinity of the Project and is therefore considered likely to have a positive impact on business in the proximity.

We do not consider that the major activities associated with the Project constitute a ‘significant business activity’ and do not envisage any material competition issues arising from the proposed Project.

Community Consultation

Consultation on the broader Salisbury City Centre Renewal Project commenced in 2010 and has been extensive and undertaken in accordance with the Salisbury Public Consultation Policy.

Due to confidentiality issues associated with the acquisition of the required land for the new Salisbury Community Hub it has not been possible to consult with stakeholders about the specifics of this Project at this stage. However, consultation relating to uses and feel for a facility within the Salisbury City Centre, in an undisclosed location was held with Council advisory groups in May 2017 to inform early concept work.

We understand Salisbury is in the process of preparing a comprehensive consultation plan for the Project in accordance with its Public Consultation Policy which is to be implemented once the confidentiality provisions are satisfied and the land acquisition is made public.

Financial Issues

The Project is expected to realise revenue of $7.07 million between the FY2018 and FY2023 financial years from the disposal of surplus land. In addition, there is an opportunity to produce recurrent revenue of $0.136 million per annum by leasing the 400m2 of floor space identified as expansion capacity within the Project scope. Realising proceeds from sale of land at the levels assumed in Council’s key financial planning documents is a Project risk that has not been identified in the Project Risk Register.

The major financial risk associated with the Project relates to construction cost overruns. We note that the Project is still in its early stages and the scope, design, funding options and costs are being explored and are yet to be finalised.

Salisbury can mitigate the risk of overruns through the implementation of the approved Salisbury Community Hub Governance Structure and Procurement Strategy.

A budget allocation of $27 million for the Project has been included in the 2017/18 Annual Plan and Budget, with the balance of the construction funding included as part of the forward budget estimates for 2018/1019. However, it is noted that as construction is scheduled to commence in early 2018 it is highly unlikely that this provision be fully expended in FY2018. Any change in the budget allocation should be reflected in future budget review processes.

It is noted that the Project coupled with Council’s other capital works projects will result in borrowings of $21.831 million in 2017/18 and $11.133 million in 2018/19. This results in Council’s Net Financial Liabilities Ratio increasing to 30.1% in 2017/18 and peaking at 38.7% in 2018/19 marginally below Council’s endorsed operating range of <40%.

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It is also noted that the ability for Council to borrow and service the debt to fund its Capital Works program is provided for within the Long Term Financial Plan with the Net Financial Liabilities Ratio remaining within Council’s endorsed operating range over the 10 year life of the Plan.

Risk Issues

A Project Risk Register has been developed and is regularly reviewed and updated for reporting to the Project Control Group and Council. A formal Project risk workshop was conducted on 8 June 2017 in which 25 risks were identified, 15 of which have an inherent risk rating of ‘High’ and one which has an inherent risk rating of ‘Very High’. Post the implementation of the recommended risk mitigation strategies, it has been assessed that there are five risks with a residual risk rating of ‘High’.

Salisbury should continue to actively review and update the Project Risk Register as the Project progresses.

Project Delivery

Salisbury has adopted a Design and Construct procurement strategy for the Project.

The Project delivery mechanisms were determined having regard to external specialist consultant advice, and are considered appropriate in terms of managing financial, construction, environmental, community and other key project risks, and in terms of alignment of Project outcomes with Council’s strategic management plans.

The Procurements performed to date have been performed in accordance with the Salisbury Procurement Policy

Conclusions

An appropriate level of “due diligence” appears to have been applied to the Project and consequently it should achieve the identified public benefits or needs. Subject to the successful implementation of the endorsed Procurement Strategy within the overall Project Delivery Framework, the financial risks to Council will be managed satisfying the principles and requirements of the Salisbury Prudential Management Policy.

City of Salisbury Section 48 Report – Salisbury Community Hub Project

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1. INTRODUCTION

1.1 Background

1.1.1 The Salisbury City Centre is one of the oldest townships in South Australia, first settled in 1839 only 3 years after the founding of South Australia. The unusual diagonal grid and road names form the triangle of the old township of Salisbury and a scattering of heritage buildings and historically significant sites still exist in the area today.

1.1.2 Located in the heart of the Salisbury City Centre the existing Salisbury Civic Centre, has served the City of Salisbury (Salisbury) and the community well since it was opened on 21 June 1975. While the civic building today is appreciated for its longevity of design appreciation, it requires major upgrade for seismic and building code compliance that will result in significant costs and operational disruption.

1.1.3 Since 2010, investigations have been undertaken to inform two interconnected components of the overarching Salisbury City Centre Revitalisation Project, addressing the Salisbury City Centre Renewal project at a strategy, policy and urban design level and the asset investigations in respect to Council Buildings.

Figure One: Salisbury City Centre Investigation Report Components


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1.1.4 Salisbury City Centre Renewal Project

1.1.4.1 It is proposed that the existing Civic Centre will be demolished as part of the Community Hub Project to support delivery of Council’s endorsed Salisbury City Centre Renewal Strategy facilitating the construction of the extension to Church Street through Council’s existing site, to connect to Gawler Street and Salisbury Highway.

1.1.4.2 Church Street’s extension will facilitate the potential delivery of mixed use buildings fronting the new street bringing a range of new commercial, retail and residential development opportunities into the new Centre.

1.1.4.3 The timing for the construction of the Church St extension and release of parcels of land to market is subject to future Council decisions, negotiation with adjacent land owners and appetite of the market for mixed use development within the Salisbury City Centre.

1.1.4.4 It is noted that the Church Street extension is outside the scope of this Project and is unfunded.

1.1.5 Council Asset Investigations

1.1.5.1 In response to the Recreation Services and Library & Community Centres Program Reviews, Council resolved on 24 February 2014 to implement a strategy to move towards a ‘community hub’ model for community centres including the development of a new regional hub located at the Salisbury City Centre (Resolution 2152/2014).

1.1.5.2 The Policy and Planning Committee at its meeting on 20 July 2015 considered a report that defined Council’s core facility needs for office and community space and endorsed a short list of the following five site location options for further investigation.

(a) Sexton carpark;

(b) Redeveloped existing civic centre;

(c) Judd Street/Len Beadell Library;

(d) John Street; and

(e) Town Square Civic Park.

1.1.5.3 The Committee also considered high level order of costs to upgrade the existing civic centre and for the construction of a Community Hub and office accommodation using Council owned sites to inform the scale and delivery options to be explored in subsequent phases of the project and the impact on the long term financial plan. These are shown in Table One.


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Table One: High level order of cost estimates

Description Indicative Cost

Upgrade the existing civic centre to meet building code $11,250,000

Construct a stand-alone Community Hub $17,260,000

Construct a stand-alone Council administration office building

$21,150,000

Construct a combined Community Hub and office administration facility

$39,400,000

1.1.5.4 Following the investigation of the five short listed sites, two preferred sites

(John Street and Sexton Carpark) were presented to the Policy and Planning Committee at its meeting on 21 September 2015.

1.1.5.5 At that meeting the Committee endorsed entering into a four month exclusivity negotiation period with DiMauro Group for the purchase of their land located in John Street to explore the potential for delivery of the Community Hub and office accommodation on the preferred James Street site adjacent the Town Square Civic Park (hereafter referred to as the Civic Square). Although this process extended beyond that time frame Council was provided with appropriate updates.

1.1.5.6 On 20 June 2016 the Policy and Planning Committee received an update on the current status of work on the Salisbury Community Hub and office accommodation noting that the John Street site was not available for acquisition as a result of car parking leases and restrictions over the land holdings. During the exclusivity negotiations an alternate site owned by the DiMauro Group adjacent the Civic Square was identified as being of interest to Council (Civic Square Site).

1.1.5.7 Accordingly, the Committee endorsed further negotiation, under a Heads of Agreement, with the DiMauro Group for the purchase of the Civic Square Site.

1.1.5.8 On 18 July 2016 the Policy and Planning Committee endorsed that the Town Square Civic Park Site (Civic Square Site) be the preferred site for the Salisbury Community Hub and Civic Centre and that the Chief Executive Officer be authorised to resolve the precedent conditions required to secure the site and enter into a land contract for the purchase of the land subject to certain conditions and resolution of rights of ways and easements with settlement by 30 June 2017.

1.1.6 In recognition of the objectives of the Salisbury City Centre Renewal Project and the asset investigations work undertaken, Council at its meeting on 27 February 2017 resolved to endorse the recommendation from the Policy and Planning Committee on 20 February 2017 (Item 1.10.1) authorising the CEO to execute the contract for the


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purchase of the land at the Civic square Site subject to terms and conditions outlined in the report.

1.1.7 The contract for the purchase of the land to enable the Salisbury Community Hub and office accommodation to be constructed on the Civic Square Site was executed on 30 March 2017. The conditions precedent date has been extended from 30 May 2017 to 31 July 2017. Settlement of the Land 30 days after the removal of the electrical infrastructure. It is noted latent conditions discovered on the site may affect conditions precedent close out process.

1.2 Rationale

1.2.1 The Salisbury Community Hub is the central project identified to act as a trigger and catalyst for a new future for the Salisbury City Centre. The construction of the new building fronting the Civic Square and relocation of the civic functions and library services will free up Council land holdings for disposal as future development sites to attract new private investment into the City Centre.

1.2.2 A regional Community Hub in the Salisbury City Centre is considered to provide Council a once in a generation opportunity for Council to deliver on multiple strategic objectives including:

1.2.2.1 Delivery of a regionally significant contemporary civic and community services and facilities that meet the needs of the existing Salisbury community and are flexibly designed to respond to the needs of future generations and technologies;

1.2.2.2 Delivery of a place for the community that is welcoming, friendly, safe and sets a new standard for community facilities:

1.2.2.3 Rationalisation of existing Council facilities to improve efficiencies and optimise floor space usage;

1.2.2.4 Act as a major catalyst towards delivery of the Salisbury City Centre Renewal Strategy including investigations into ways this project investment can attract or bring forward private investment into the Salisbury City Centre;

1.2.2.5 Support local jobs and economic growth in the northern region of Adelaide; and

1.2.2.6 Enable delivery of best practice service delivery through modern workplace design and technology.

1.2.3 The Salisbury Community Hub project as proposed is strongly aligned to the vision in the Salisbury 2030 Plan, provides for the future needs of the Salisbury community and has been scoped to stimulate the revival of the City Centre.


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1.3 The Project

1.3.1 The Salisbury Community Hub Project (Project) involves the construction of a new building to serve as the Council’s main customer and community services centre; incorporating civic spaces, council chambers, foyer / gallery, community accessible meeting areas and a learning and information centre (modern interpretation of a library) along with a functional office space for the Council’s administration.

1.3.2 The capital budget for the Project has been set at $43.82 million to be expended over the 2016/17 to 2019/20 Financial Years (Council Resolution Number 1170/2016 on 27 June 2016) which covers the following scope of works.

1.3.2.1 The design and construction of the new building;

1.3.2.2 Partial upgrades to the adjacent Civic Square to fully integrate with the Salisbury Community Hub building and support use as an outdoor programmable space;

1.3.2.3 Upgrade of the immediately adjacent streetscapes to fully integrate with the new building and provide accessible and convenient access and car parking;

1.3.2.4 Demolition of the existing Civic Centre at 12 James Street post the occupation of the new facility; and

1.3.2.5 Disposal of parcels of the existing Len Beadell Library and 12 James Street Civic Centre sites.

1.3.3 The site identified for the Salisbury Community Hub is located with a significant frontage onto the Civic Square with direct road frontage to James and John Streets.


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1.4 Legal Framework and Prudential Issues

1.4.1 Salisbury has adopted a Prudential Management Policy, dated 27 July 2015 (Decision Number 0505/2015) that sets out Council’s approach for prudential management of all its projects. The objectives of the Policy are:

1.1 to ensure that a Council project is undertaken only after an appropriate level of “due diligence” is applied to the proposed project; and

1.2 to ensure that each Council project is:

managed during the project, and

evaluated after the project, to

achieve identified public benefits or needs; and to minimise financial risks.

1.4.2 The principles of the Policy require the following.

“The decision maker should determine with respect to any project (based on the size, complexity and amount of financial or other risk) the level of:

Due care and diligence that is required


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At a minimum this should require an assessment of:

o the benefits and needs of the project;

o whether the project will (or might) generate any additional risks for the Council;

o the financial sustainability of a project (large or small) and whether funding of the whole-of-life costs of the project will (or might) require additional allocations beyond those already accommodated in Council’s annual budget and long-term financial plan.

Details required

This may range from a single page describing the project scope, to a comprehensive business case (for example using the Corporate templates - “Project Management – Business Case”).

Risk assessment appropriate

This may range from, a simple note that the proposed project has been determined as being of low or negligible risk, to a more detailed risk assessment in line with Council’s Risk Management framework.

Expertise required

This may range from a single staff member (for the smallest projects with least risk), to a working party of staff and external specialists with expertise in areas such as engineering, finance, project management, town planning (for more complicated and/or riskier projects).

Accountability and reporting required

Post project implementation review and evaluation

o Evaluation and review can identify systemic issues and opportunities for improvement.”

1.4.3 This report has been prepared to ensure the requirements of the Salisbury Prudential Management Policy have been met.

1.4.4 In addition, the Local Government Act 1999 (Act) Section 48 requires Council to consider a report addressing the prudential issues set out in subsection 2 when a project meets certain criteria, specified in (1) (a) and (b), namely where a Council:

(a) engages in a commercial project (including through a subsidiary or participation in a joint venture, trust, partnership or other similar body) where the expected recurrent or capital expenditure of the project exceeds an amount set by the council for the purposes of this section; or


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(b) engages in any project (whether commercial or otherwise and including through a subsidiary or participation in a joint venture, trust, partnership or other similar body)—

(i) where the expected expenditure of the council over the ensuing five years is likely to exceed 20 per cent of the council's average annual operating expenses over the previous five financial years (as shown in the council's financial statements); or

(ii) where the expected capital cost of the project over the ensuing five years is likely to exceed $4,000,000.

1.4.5 We note that the $4.00 million threshold in Section 48 (1) (b) (ii) is indexed by CPI from a September 2009 base year. As at the date of this report, the relevant threshold is $4.628 million.

1.4.6 The prudential issues identified in Section 48 are:

(a) the relationship between the project and relevant strategic management plans;

(b) the objectives of the Development Plan in the area where the project is to occur;

(c) the expected contribution of the project to the economic development of the local area, the impact that the project may have on businesses carried on in the proximity and, if appropriate, how the project should be established in a way that ensures fair competition in the market place;

(d) the level of consultation with the local community, including contact with persons who may be affected by the project and the representations that have been made by them, and the means by which the community can influence or contribute to the project or its outcomes;

(e) if the project is intended to produce revenue, revenue projections and potential financial risks;

(f) the recurrent and whole-of-life costs associated with the project including any costs arising out of proposed financial arrangements;

(g) the financial viability of the project, and the short and longer term estimated net effect of the project on the financial position of the council;

(h) any risks associated with the project, and the steps that can be taken to manage, reduce or eliminate those risks (including by the provision of periodic reports to the chief executive officer and to the council);

(i) the most appropriate mechanisms or arrangements for carrying out the project.”

1.4.7 We note that although the Project is not of a commercial nature, the expected capital cost of the project over the ensuing five years will exceed the threshold in Section 48(1)(b)(ii). Accordingly, Salisbury has engaged BRM Holdich to prepare a report


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which would satisfy the requirements of Section 48 of the Act, which are set out in Attachment One, and the Salisbury Prudential Management Policy.


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2. RELATIONSHIP WITH RELEVANT STRATEGIC MANAGEMENT PLANS

Local Government Act, Section 48 (2) The following are prudential issues for the purposes of subsection (1):


2.1 Relevant Strategic Management Plans

2.1.1 Section 122 of the Act requires a council to develop and adopt strategic management plans; these are required to incorporate the extent to which a council’s objectives are related to regional, state and national objectives.

2.1.2 For the purposes of this report the relationship between the Project and the following plans is considered relevant.

2.1.2.1 City of Salisbury

Salisbury City Plan 2030;

Annual Plan 2017/18;

Long Term Financial Plan;

Asset Management Plans; and

Other Plans

o Guiding Principles for Community Hubs.

2.1.2.2 Regional

Northern Economic Plan.

2.1.2.3 South Australian State Government

South Australian Strategic Plan;

30 Year Plan for Greater Adelaide; and

State Government Strategic Priorities.

2.1.2.4 National

No relevant national plans were identified.


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2.2 Salisbury City Plan 2030

2.2.1 The strategic direction for the City of Salisbury is detailed in City Plan 2030,

2.2.2 The Salisbury vision is for ‘a flourishing City with opportunity for all’.

2.2.3 This vision is implemented through four key directions:

The Prosperous City

The Sustainable City

The Liveable City

Enabling Excellence

2.2.4 The Salisbury Community Hub Project aligns with the first three key directions of the City Plan 2030 as shown in Table Two.

Table Two: Degree of Alignment with City Plan 2030

Key Direction

Objective Strategy / Critical Action Alignment with Project

The Prosperous City

Have well planned urban growth that stimulates investment and facilitates greater housing and employment choice.

Regenerate the Salisbury City Centre into a vibrant, diverse and successful destination recognised as the business heart of northern Adelaide.

Deliver a new community hub in the Salisbury City Centre incorporating library, civic facilities, offices and commercial space to stimulate investment opportunities.

The Salisbury Community Hub project provides for the future needs of the Salisbury community and has been scoped to stimulate the revival of the City Centre. The project involves construction of a new building that will deliver new face to face customer service, community services, library, civic spaces and community accessible meeting spaces, together with the provision of functional office space for Council’s administration.

The Sustainable City

Have a community that is knowledgeable about our natural environment and embraces a sustainable lifestyle.

Ensure long term flexibility in the management of our urban spaces (assets and infrastructure) to adapt to a changing environment.

Opportunity for the new Salisbury Community Hub to embody many principles of ecologically sustainable development (ESD) in a prominent public building.


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Key Direction

Objective Strategy / Critical Action Alignment with Project

The Liveable City

Have interesting places where people want to be.

Be a connected city where all people have opportunities to participate.

Connect people to information, people and programs that support them to achieve their life goals.

Provide opportunities for the community to engage in learning.

Provide people with the infrastructure, skills and knowledge to effectively participate in the digital age.

Enhance our neighbourhoods, streets and public spaces so they are welcoming and connected.

Provide well maintained, clean and attractive places and facilities.

The Salisbury Community Hub will bring together the community, civic and learning functions within a central precinct located adjacent to a quality outdoor event space. The hub will be a place where the community can access a range of formal services, activities and programs while also participating in unstructured opportunities to gather and learn and feel part of the Salisbury community.

2.2.5 The Salisbury Community Hub is specifically referenced in the Salisbury City Plan

2030 as a critical action that needs to be undertaken in order for Salisbury to advance its vision.

2.2.6 With specific reference in the City Plan and alignment with a number of objectives, the Project is considered to be strongly aligned to the City of Salisbury City Plan 2030.

2.3 Annual Plan 2017/18

2.3.1 The Salisbury Annual Plan 2017/18 links the overarching long term City Plan 2030 with the budget, the services delivered and rate levels.

2.3.2 The Salisbury Community Hub (referred to in the Annual Plan as the Salisbury City Centre Regional Community Hub) is specifically referenced in the Annual Plan’s Capital Works Program with the amounts as shown in Table Three.

Table Three: Current Budget Provisions per Annual Plan 2017/18

Current Budget Provisions

Operating Capital

2017/18 (million) $27.000

2018/19 (million) $12.080

2019/20 (million) ($6.070)

Total (million) $0.00 $33.01


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2.3.3 A budget allocation of $27.0 million for the project has been included in the 2017/18 financial year, with the balance of the construction funding included as part of the forward budget estimates for 2018/1019. However, it is noted that as construction is planned to commence in early 2018 it is therefore highly unlikely that this provision will be fully expended in the 2018 Financial Year. If this results in any change in budget allocation this should be reflected in future budget review process.

2.4 Long Term Financial Plan

2.4.1 While seeking to achieve its corporate goals, Salisbury is mindful of its responsibilities to be financially sustainable. Being financially sustainable means having a financial position capable of meeting long term service and infrastructure levels and standards, acceptable to the community, without substantial increases in rates or disruptive cuts to services. It implies equity between generations.

2.4.2 The 2017/18 Long Term Financial Plan (LTFP) reflects these responsibilities and aspirations.

2.4.3 The 2017/18 LTFP covers the period 2017/18 to 2026/27 and is updated annually to incorporate changes in external factors such as government policy and local and global economic factors.

2.4.4 The 2017/18 LTFP incorporates a net provision of $33.01 million for the construction of the Salisbury Community Hub Project. This is consistent with the provision approved by Council on 27 June 2016 in adopting the 2016/17 Annual Plan and Budget (original net $36.75 million or total $43.82 million with $3.74 million to be expended in the 2016/17 financial year).

2.4.5 As Land settlement on the acquisition parcel was originally forecast to occur on 30 June 2017 it was not included in the LTFP projections. The 2017/18 budget will be revised for the land acquisition at the relevant budget review, in the prior period when the 2018/19 LTFP is prepared.

2.4.6 Salisbury will need to ensure the LTFP is amended to reflect any changes in future operating costs which are associated with the assets created by the Project.

2.4.7 Salisbury is pursuing grant funding opportunities from other tiers of government to reduce the overall cost of the Project. Any grants obtained would improve the LTFP projections. If Salisbury is successful in obtaining any grant funding this should be reflected in future versions of the LTFP.

2.5 Asset Management Plans

2.5.1 Salisbury owns and is responsible for the management, operation and maintenance of a diverse asset portfolio that provides services and facilities to the community. Asset Management Plans have been developed to ensure that Council continues to provide effective and comprehensive management of its asset portfolios.

2.5.2 The Project works will create new Council assets that will need to be included within Council’s Asset Management Plan on completion.


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2.5.3 Council’s Asset Register will also need to be updated where assets are to be demolished or relocated from the existing Civic Centre to the new Community Hub.

2.5.4 The existing Civic Centre and parts of the Len Beadell Library will be demolished and disposed of. The Buildings Asset Management Plan will need to be amended to reflect this.

2.6 Guiding Principles for Community Hubs

2.6.1 Salisbury has adopted a document titled ‘Guiding Principles for Community Hubs’.

2.6.2 The essential characteristics of a community hub model were described in the 2014 Library & Community Centre Review and are shown below.

2.6.2.1 Responds to, and is shaped by, the unique circumstances, needs and assets of the community;

2.6.2.2 Co-locate or cluster a range of community facilities and human services;

2.6.2.3 Include a variety of uses that attracts different groups of people at different times of the day for a variety of purposes and meet a wide range of community needs and support community strengths;

2.6.2.4 Attracts people and are identified as a focal point and gathering place for the community;

2.6.2.5 Is readily accessible to ensure all members of the community can utilise them; and

2.6.2.6 Have a civic quality, sense of stability and level of amenity that marks them as an important place in the community.

2.6.3 The proposed Salisbury Community Hub has been designed to reflect these characteristics.

2.7 Regional Objectives

2.7.1 The State Government in collaboration with the Cities of Salisbury, Playford and Port Adelaide Enfield has developed the Northern Economic Plan that provides a clear pathway for economic and social programs in the region over the next 10 years.

2.7.2 The proposed Salisbury Community Hub is aligned with the vision for Northern Adelaide – ‘strong foundations, creating jobs, confident communities, improving lives’.

2.8 South Australian State Government Plans

2.8.1 30 Year Plan for Greater Adelaide


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2.8.1.1 The State Government's broad vision for sustainable land use and the built development of the state is outlined in the Planning Strategy. The relevant volume of the Planning Strategy is the 30-Year Plan for Greater Adelaide (2017 Update).

2.8.1.2 The 30 Year Plan (2017 Update) retains the three key objectives of the original Plan, these are:

(a) Maintain and improve liveability;

(b) Increase competitiveness; and

(c) Drive sustainability and resilience to climate change.

2.8.1.3 The Salisbury Community Hub is likely to advance the objective of ‘Liveability’ as it provides the Salisbury community with a vibrant place to meet, connect and to learn.

2.8.1.4 30 Year Plan (2017 Update) builds on the existing Plan’s principles and strengthens the Plan’s focus on creating healthy neighbourhoods where walking and public life are encouraged.

2.8.1.5 The 30 Year Plan (2017 Update) simplifies the 89 recommendations in the 2010 Plan to six high level targets which better align the targets with the strategic directions.

2.8.1.6 Target Two focuses on ‘More ways to get around’ which supports the concept of housing, commercial and community activity being close to and connected with transport. Target Four focuses on ‘Walkable Neighbourhoods’ which encourages the creation of thriving hubs of commercial and community activity.

2.8.1.7 The bringing together of the community, civic and learning functions located adjacent to a quality outdoor event space as proposed in the Salisbury Community Hub, where the community can access a range of formal services, activities and programs while also participating in unstructured opportunities to gather, learn and feel part of the Salisbury community, is essential to the progression of Targets Two and Four in the 30 Year Plan (Update 2017).

2.8.2 State Strategic Plan

2.8.2.1 The State Strategic Plan is built on six pillars and identifies a number of targets. Table Four identifies the relationship between the Project and the ‘Our Community’ and ‘Our Prosperity’ pillars and the vision, goals and targets which are supported or advanced through the Project.

Table Four: The Project Alignment with the State Strategic Plan


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Relevant State Pillar State Goals and Targets Advanced by the Project

Our Community

Vision: Our Communities are vibrant places to live, work, play and visit.

Goal: We are committed to our towns and cities being well designed, generating great experiences and a sense of belonging.

Primary Target 1: Urban spaces

Increase the use of public spaces by the community

Our Prosperity

Vision: South Australia plans and delivers the right infrastructure.

Goal: We overcome distance by using digital technology.

Primary Target 32: Customer and client satisfaction with government services.

Primary Target 39: Competitive business climate.

2.8.3 State Government Strategic Priorities

2.8.3.1 The State Government has also set seven strategic priorities. Priority one focuses on ‘Creating a vibrant city’ and Priority five focuses on ‘Safe communities, healthy neighbourhoods’. The bringing together of the community, civic and learning functions located adjacent to a quality outdoor event space as proposed in the Salisbury Community Hub, where the community can access a range of formal services, activities and programs while also participating in unstructured opportunities to gather, learn and feel part of the Salisbury community, contribute to the progression of Priorities one and five in the State Government’s seven strategic priorities.

2.9 National Objectives

2.9.1 While we have not identified any Commonwealth Government plans that relate specifically to the Salisbury Community Hub, we note that the Department of Social Services mission of ‘improving the lifetime wellbeing of people and families in Australia’ will be advanced through a number of the programs to be offered at the proposed Salisbury Community Hub.


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3. OBJECTIVES OF THE DEVELOPMENT PLAN

Local Government Act, Section 48 (2) the following are prudential issues for the purposes of subsection (1):


3.1 Development Approval

3.1.1 Development in Salisbury is governed by the Development Act 1993, the associated Development Regulations 2008 and the Development Plan - Salisbury Council.

3.1.2 The Development Plan outlines what sort of developments and land use are and are not envisaged for particular zones and various objectives, principles and policies further controlling and affecting the design and other aspects of proposed developments. As such, the Development Plan covers matters including zoning issues, building appearance and neighbourhood character, land division, building siting and setbacks and environmental guidelines.

3.1.3 The Development Plan is structured into Sections, as follows.

3.1.3.1 General, containing general policy that applies across the council area and relates to a range of social, environmental, and economic development issues. These issues establish the development standards that apply to all forms of development and provide a yardstick against which the suitability of development proposals is measured.

3.1.3.2 Zones, these provisions give greater certainty and direction about where certain forms of development should be located and identifies generally envisaged forms of development. The objectives and design requirements for development in the particular area are also expressed.

3.1.3.3 Tables that list the conditions which are applicable to complying development, numeric values for setbacks from road boundaries and car parking rates for certain types of development. Conditions for complying development are grouped into their respective tables.

3.1.3.4 Mapping, showing the broad distribution of land uses and movement patters throughout the council area.

3.1.4 The current consolidation of the Development Plan is dated 15 December 2016.

3.1.5 The Salisbury Community Hub involves works which are defined as “development” under the Development Act 1993.

3.2 Development Zone

3.2.1 The Salisbury Community Hub Project is located within the new Salisbury City Centre Urban Core Zone.


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3.2.2 The Urban Core Zone was introduced over the Salisbury City Centre in November 2016, aligning the planning policies to the objectives sought through the Urban Design Framework and Council’s broader strategic directions for the City.

3.2.3 Within the Salisbury City Centre Urban Core Zone public notice categories are those prescribed in Schedule 9 of the Development Regulations 2008. Under Schedule 9 all listed forms of development within the Zone are ‘Category 1’ for the purposes of public notification under Part 1 (6)(1)(h) of the Schedule, and do not require public notification.

3.2.4 Objectives 1, 2, 3, 5 and 6 related to the Salisbury City Centre Urban Core Zone, as shown below, are considered to be of relevance to the Project.

1 A district level centre that provides the focus for business and commercial services and employment generating land uses for the region, providing a full range of retail, commercial, civic, cultural, community, entertainment, education, religious, recreational facilities and a range of medium to high density residential development supported by high frequency public transport and open space.

2 Development within a mixed use environment that is compatible with surrounding development and which does not unreasonably compromise the amenity of the zone or any adjoining residential zone.

3 Mixed use development integrated with a high quality public realm that promotes walking, cycling, public transport patronage and positive social interaction.

5 Development that promotes street activity and interest to passing pedestrians and contributes to the liveliness, vitality and security of the public realm.

6 Development that contributes to the desired character of the zone.

3.2.5 The proposed land use and development is consistent with the Objectives of the Development Plan – Salisbury Council for the Salisbury City Centre Urban Core Zone.

3.3 Approving Authority

3.3.1 Pursuant to the Development Act 1993, a Council can make decisions on certain kinds of applications where the Council is the applicant subject to Schedule 10 of the Development Regulations 2008.

3.3.2 However, in circumstances where development is to be undertaken by a Council, and there is potential for a perception of bias or conflict, there is provision under the Development Act 1993, to refer the application to the Minister for Planning with a request for a determination that the Development Assessment Commission is the relevant authority, pursuant to Section 34(1)(b)(iii) of the Act, which reads:

“Subject to this Act, the relevant authority, in relation to a proposed development, is ascertained as follows:

(iii) the Minister, acting at the request of a council or regional development assessment panel, declares, by notice in writing served personally or by post


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on the proponent, that the Minister desires the Development Assessment Commission to act as the relevant authority in relation to the proposed development in substitution for the council or regional development assessment panel (as the case may be) then the Development Assessment Commission is, subject to subsection (2), the relevant authority.”

3.3.3 The Minister can either accede to the request and determine that the Development Assessment Commission is the relevant authority, or could decline the request and refer the application back to Council for determination.

3.3.4 Salisbury has developed an administration policy titled ‘Guidelines for Assessment of Council Development’. The purpose of the policy is to provide a probity framework for staff involved in the assessment of Council development under the Development Act 1993, and in the development of Council property, to manage any perceived and actual risks of conflict of interest in Council’s various roles.

3.3.5 Given the scale of the Project and in order to avoid the perception of bias or conflict, Salisbury has advised that the Development Plan Consent (DPC) for the Project will be referred to the Minister for Planning for consideration in accordance with Council’s internal policy.

3.3.6 The Design Team will be responsible for securing Development Plan Consent (DPC) through the Development Assessment Commission. Post Novation, the Design Team and Design and Construct Contractor will be responsible for receiving Building Rules Consent and Development Approval.

3.3.7 In the event that the application is referred back to Council for determination then the application would be referred to the Development Assessment Panel for determination. In these circumstances Salisbury should apply the Guidelines for Assessment of Council Development which were adopted on 14 January 2014.

3.3.8 These Guidelines cater for circumstances when Council’s property development and property management activities have the potential to create real or perceived conflicting roles with its statutory development assessment functions.

3.3.9 We note that Development Approval is a prerequisite for the Project to proceed.


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4. ECONOMIC DEVELOPMENT



4.1 Contribution to Economic Development

4.1.1 Economic development can be defined as efforts that seek to improve the economic well-being and quality of life for a community by creating and/or retaining jobs and supporting or growing incomes and the tax base.

4.1.2 The contribution to economic development of the local area from the Salisbury Community Hub Project will primarily come from the following sources:

4.1.2.1 Construction activity; and

4.1.2.2 Any increase in activity for the region through the provision of the new and multipurpose community, civic and office space.

4.1.3 There are economic and employment multiplier benefits to the broader economy from the economic activity that will be generated during the construction phase of the Project.

4.1.3.1 The economic impact assessment undertaken to identify the potential jobs and incomes that may be associated with the Project is based on a measure of the value added and employment associated with the investment. This is consistent with the predominant measure of national economic activity, Gross Domestic Product.

4.1.3.2 The expenditures associated with this Project will have direct economic effects, indirect effects of related purchases in the broader economy and induced effects of spending on goods and services by the employees of the companies providing goods and services to the Project.

4.1.4 To quantify the benefits from these multiplier effects Salisbury commissioned modelling using Remplan software based on Input-Output methodology, a common tool for measuring secondary and tertiary economic effects. The data set used for the analysis specifically relates to the City of Onkaparinga which were deemed as having similar economic characteristics to Salisbury.

4.1.5 For modelling purposes, the economic impact has been estimated based on $32.739 million of expenditure associated with the construction works including the base build, fit out, ICT and fixtures, fittings and equipment. This figure specifically excludes professional fees, contingencies, external civil and landscaping, statutory charges, decanting, post-occupancy and project collaboration software.


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4.2 Economic Impact of Construction Activity

4.2.1 Total output from the construction of the Salisbury Community Hub Project is estimated to increase by up to $65.523 million, including all direct, industrial and consumption effects. This represents a Type 2 Output multiplier of 2.001 and is comprised of the following.

4.2.1.1 The estimated total value of the construction works of $32.739 million.

4.2.1.2 A rise of $26.733 million in the demand for intermediate goods and services from a direct increase in output from the construction investment, including the flow on effects as demand for local goods and services increases. This represents a Type 1 Output multiplier of 1.817.

4.2.1.3 The consumption effects from the creation of jobs in the economy arising from the increases in direct and indirect output which are estimated to be $6.050 million.

4.2.2 Based on the cost of the construction works for the Project, the construction output is estimated to result in an increase of up to 150 jobs. This represents a Type 2 Employment multiplier of 3.409, as detailed below.

4.2.2.1 The direct effect is estimated to create up to 44 jobs.

4.2.2.2 The indirect or flow on effect is estimated to result in the gain of a further 81 jobs. This represents a Type 1 Employment multiplier of 2.841.

4.2.2.3 The consumption effect is estimated to further boost employment by 25 jobs.

4.2.3 The estimated impact of the Project on wages and salaries is an increase of up to $10.521 million. This represents a Type 2 Wages and Salaries multiplier of 2.817, as detailed below.

4.2.3.1 The increase from the direct effect is estimated at $3.735 million.

4.2.3.2 The indirect or flow on effect is estimated at $5.461 million, which represents a Type 1 Wages and Salaries multiplier of 2.462.

4.2.3.3 The consumption effects under this scenario are expected to further boost employment in sectors such as retail therefore further increasing wages and salaries by an estimated $1.325 million.

4.2.4 The total value-added, including all direct, industrial and consumption effects, of the Project is estimated to increase by up to $20.253 million. This represents a Type 2 Value-added multiplier of 2.791 and is comprised of the following.

4.2.4.1 A direct impact of $7.258 million.


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4.2.4.2 An indirect or flow-on effect in terms of local purchases of goods and services are anticipated of $9.563 million, which represents a Type 1 Value-added multiplier of 2.318.

4.2.4.3 A consumption effect of $3.432 million, as a proportion of these wages and salaries are typically spent on consumption and a proportion of this expenditure is captured in the local economy.

4.3 Overall Economic Impact of Salisbury Community Hub Project

The total estimated combined economic impact of the Salisbury Community Hub Project is summarised in Table Five.

Table Five: Salisbury Community Hub Project Economic and Employment Benefits

Impact Direct Indirect Consumption Total Type 1

Multiplier Type 2

Multiplier

Output ($M) 32.739 26.733 6.050 65.523 1.817 2.001

Employment (Jobs) 44 81 25 150 2.841 3.409

Wages and salaries ($M) 3.735 5.461 1.325 10.521 2.462 2.817

Value-added ($M) 7.258 9.563 3.432 20.253 2.318 2.791

4.4 Impact on Business in the Proximity

4.4.1 Given the scale of the Project, it is likely that the construction phase will have a negative impact on businesses in the proximity. Accordingly, Salisbury should ensure that its Project Management Plan addresses the need to minimise the impact on businesses in the area during construction.

4.4.2 Following completion of the Project, it is expected there will be an increase in patronage and activity at the Salisbury Community Hub as the new design will increase the range and scope of community programs, services and activities that can be provided. This is likely to provide additional custom and trade for a wide range of businesses in the vicinity of the Project and is therefore considered likely to have a positive impact on business in the proximity.

4.5 Fair Competition

4.5.1 The operations of a Community Hub including civic and community assets impact on competition in the local market place to the extent that it provides services which are also provided by the private sector.

4.5.2 Consideration must be given as to whether the activities of Salisbury constitute a “significant business activity” in accordance with the Clause 7 Statement of the Competition Principles Agreement and the Government Business Enterprises (Competition) Act 1996 which provides the framework for implementing National Competition Policy by local government entities in South Australia.


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4.5.3 If the proposed activities at the Salisbury Community Hub were considered to constitute a significant business activity, deemed to be significant within the definitions of Clause 7, then Salisbury would need to give consideration to whether competitive neutrality principles will need to be applied to their activities. Competitive neutrality is about ensuring that the significant business activities of publicly owned

4.5.4 The initial schedule of areas for the facility provides for 400m2 of expansion capacity for expanded community services or office accommodation. Until the space is required by Council it has been identified as lettable floor space for use as a café/business incubator with potential lease revenue. However, given the relatively small size of the area, this lettable floor space is not considered to constitute a significant business activity.

4.5.5 Given the nature of the other activities proposed for the Salisbury Community Hub we do not consider that they constitute a ‘significant business activity’ and do not consider that there are any material competition issues arising from the proposed Project.


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5. COMMUNITY CONSULTATION



5.1 Level of Consultation

5.1.1 Salisbury is strongly committed to open, accountable and responsive decision making, which is informed by effective communication and consultation between the Council and the community. The Public Consultation Policy, prepared pursuant to Section 50 of the Local Government Act 1999, adopted on 23 November 2015 (Decision Number 0744) reflects this commitment.

5.1.2 The Policy sets out the following principles as central to the Public Consultation process.

5.1.2.1 Participation: Council views all members of its community as being citizens and recognises that citizenship grows and develops with the participation of citizens in democratic processes.

5.1.2.2 Respect: Council values and respects the diversity of the community of the City of Salisbury and believes that all citizens have the right to be consulted and to participate in Councils consultative and decision-making processes.

5.1.2.3 Partnership: Council will work in partnership with the community to shape the future of the City of Salisbury because it believes that the City’s future is best achieved through an active and informed citizenry.

5.1.2.4 Wellbeing: Council believes that community wellbeing, vibrancy and sustainability is enhanced by citizens participating in Council’s decision-making process.

5.1.2.5 Accountability: Council is accountable to its community through Community participation and engagement for the management of its resources, assets and expenditure and for the decisions it makes.

5.1.2.6 Accessibility: Council recognises that there are a number of groups within the community who have particular requirements to enable them to participate effectively in decision making processes. Council will ensure that any barriers to effective community participation and engagement are addressed.

5.1.3 In applying this policy, Salisbury will utilise its Community Engagement Framework to enable a consistent and effective approach to consultation by staff.


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5.1.4 Significant community engagement has been undertaken since 2010 as part of the broader Salisbury City Centre Renewal Strategy. Much of this information and findings has directly informed the first phase of defining a vision and short listing a set of preferred options for the detailed feasibility for the Salisbury Community Hub.

5.1.5 An external reference panel was established to work with staff on the scoping of the Salisbury Community Hub. The first meeting of this reference panel was held on 21 December 2014.

5.1.6 The Project has also been flagged within the 2016/17 and 2017/18 Annual Plan consultation and end user groups have been involved in early concept development.

5.1.7 However, due to the confidentiality issues associated with the acquisition of the required land to enable the new Salisbury Community Hub to be constructed it has not been possible to consult with stakeholders about the specifics of the site location and only general principles relating to the Project at this stage.

5.1.8 Salisbury is in the process of developing a comprehensive Communication, Workplace and Change Management and Marketing Strategy (Communication Plan) to fulfil its community consultation obligation with external consultant assistance. The strategy will cover the full lifespan of the Salisbury Community Hub project.

5.1.9 Once the land is settled the Communication Plan should be implemented.

5.1.10 The Project is considered to be highly complex in respect to the value of development, political and community interest and operational impact. Accordingly, Salisbury is proposing that the Project involve two independent but connected components for engagement and consultation.

5.1.10.1 External communication strategy that will be directed towards identified external stakeholders and facility users including project media, message timing calendar linked to project decision milestones and broader project promotion.

5.1.10.2 Internal communication will take the form of a change management strategy that will be focused on communication and change preparedness for Council staff, volunteers and Elected Members.

5.1.11 External and community engagement for the Salisbury Community Hub project will be managed by Council with key input from the Design Team in terms of attendance and preparation of relevant communication material.

5.1.12 The Design Team will work with the Project Client Representative during the Project Mobilisation Initiation Phase to identify the end user groups, staff, advocacy partners, strategic land owners, existing facility customers, Salisbury city centre service providers, general community and government agencies that should be consulted and map out timing and format for these engagements to align with the design workshop process and broader stakeholder engagement strategy.


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5.2 Community influence and contribution

5.2.1 The outcomes of the community engagement undertaken since 2010 as part of the broader Salisbury City Centre Renewal Strategy have directly informed the first phase of defining a vision and short listing a set of preferred options for the detailed feasibility for the Salisbury Community Hub.

5.2.2 Council is mindful that due to the confidentiality provisions relating to the land acquisition, the Salisbury Community and the people Council is seeking to attract to use the new facility have not been consulted with on the concept designs ideas. However, consultation relating to uses and the feel for a facility within the Salisbury City Centre, in an undisclosed location, was held with Council advisory groups in May 2017 to inform early concept work.

5.2.3 However, Council is in the process of developing a comprehensive communication and consultation plan for the Project. It is recommended that the plan be implemented as soon as the land acquisition and project site are made public.

5.2.4 All future communication and consultation on the Salisbury Community Hub should be conducted in accordance with Council’s Public Consultation Policy as soon as the confidentiality provisions for the acquisition of the required land have been satisfied and the location of the site and project have been made public.


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6. FINANCIAL ASSESSMENT





6.1 Revenue Production, Revenue Projections and Potential Financial Risks

6.1.1 Revenue Production and Projections

6.1.1.1 The Project is expected to generate revenue from the disposal of existing Council owned assets (Len Beadell Library and Civic Centre at 12 James Street) and from leasing an area of floor space in the Community Hub.

6.1.1.2 Based on a McGees Property Group valuation completed in 2015, revenue from the disposal of the Len Beadell Library and 12 James Street is assumed to be $7.07 million. The breakdown per site is shown in Table Six.

Table Six: Disposal estimates

Facility Approved Project budget 2016/17 ($)

Len Beadell Library 3,070,000

Sexton carpark

12 James St 4,000,000

Total 7,070,000

6.1.1.3 In addition to revenue generated by the disposal of assets, the initial

schedule of designs provide for 400m2 of expansion capacity for expanded community services or office accommodation.

(a) Until this space is required by Council, it has been identified as lettable floor space for use as a café/business incubator with potential lease revenue.

(b) Rider Levett Bucknall in their Order of Cost Summary and Net Present Value Analysis (July 2016) adopted a rental rate of $340m2 benchmarked against the market for Property Council of Australia (PCA) A Grade buildings with 5 Star NABERS (National Australian


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Built Environment Rating System) and 5 Star AGBC (Australian Green Building Council) ratings.

(c) At this rental rate, the potential annual rent that could be derived from this area would be in the order of $0.136 million.

(d) Given the uncertainty over whether this area will be available for lease or not, and what the area would be used for, it is appropriate that no revenue has been projected in the LTFP from this source.

6.1.2 Potential Financial Risks

6.1.2.1 The Project Risk Register identifies two key financial risks.

(a) The first is the financial risk relating to the ability to deliver an outcome that meets community expectations within the financial constraints imposed by Council. The high order of costs provided by Rider Levett and Bucknall (RLB) in July 2016 estimate that the costs are approximately 1% higher than the approved capital budget. This estimate was based on an initial Community Hub concept and building area which is still to be refined.

(b) The second financial risk relates to the potential for construction cost overruns.

6.1.2.2 These financial risks can be managed by adopting mitigation strategies such as adopting detailed project management plans, ensuring contractual protections are in place and detailed cost / value management techniques.

6.1.2.3 In addition to the financial risks identified by Salisbury, we consider the risk of achieving the estimated $7.07 million price for the sale of surplus land to be an additional risk that should be reflected in the Project Risk Register.

6.2 Recurrent and Whole of Life Costs, Financial Arrangements

6.2.1 Recurrent costs

6.2.1.1 No detailed analysis of recurrent costs has been undertaken at this stage of the Project while the Community Hub concept and building designs are still to be refined.

6.2.1.2 Once the Functional Design Brief is finalised Council should undertake an analysis to ensure that it identifies and understands the recurrent costs associated with the Project.

6.2.2 Whole of Life Costs

6.2.2.1 Table Seven presents a whole of life (Net Present Value) calculation prepared by RLB and presented to the Policy and Planning Committee on 18 July 2016.


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6.2.2.2 The following assumptions have been made to assess the whole of life costs for the Project:

(a) The capital budget set by Council for the construction of the Salisbury Community Hub is $43.82 million. A breakdown of the Project budget is provided in Attachment Two.

(b) A 15 year analysis period has been adopted as industry standard for this form of building. This timeframe is different to the life expectancy of the asset which would be approximately 50 years.

(c) A sensitivity analysis out to 20 years has been undertaken and is included.

(d) The NPV also considers the potential lease revenue Council could secure from the 400m2 lettable floor space included in the schedule of areas for the building at the rate of $340m2.

(e) The discount rates adopted represent the LGFA rates of 3.95% for 15 years and 4.05% for 20 years.

(f) All inflows and outflows have been subject to a CPI annual adjustment based on ‘Access Economics' and also mirror the CPI rates adopted by the City of Salisbury’s long term financial plan.

Table Seven: Community Hub and Offices – Net Present Value (NPV) analysis

15 year analysis period

20 year analysis period

Construction Capital Cost

exclusive of land sales

Option 1 (Preferred)

Civic Square with DiMauro land

$43,355,000 $45,367,000 $43,248,000

Option 2

Sexton Hub and Office

Differential to preferred option

$42,371,000

2.3%

$44,375,000

2.2%

$42,914,000

Option 2

Sexton Hub and leased Office

Differential to preferred option

$39,942,000

7.8%

$44,161,000

2.7%

$33,762,000

6.2.2.3 The outcomes of this modelling has effectively confirmed that over a 15

year period there is no significant financial differential on whole of life NPV when comparing options to own versus lease the office component of the Community Hub. The NPV outcome supports Council to determine a preferred site and delivery model based on its strategic objectives alone.


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6.2.2.4 No allowance has been made in the whole of life cost to re-fit the Salisbury Community Hub once the fit-out has been fully depreciated.

6.2.3 Financial arrangements

6.2.3.1 The Project is to be funded through budget allocations in the Salisbury LTFP.

6.2.3.2 At this stage, State or Federal Government grant funding has not been secured and is not included in the Project’s proposed financial arrangements.

6.2.3.3 There may be opportunities for Salisbury to explore grant funding opportunities such as a Places for People Open Space Grant.

6.2.3.4 Grant funding would reduce the reliance on Council financial resources and the impact on the LTFP.

6.3 Financial Viability

6.3.1 Financial viability can be defined by the ability to generate sufficient income to meet operating expenses, financial obligations and to provide the potential for future growth.

6.3.2 While the Project is not forecast to produce a material revenue stream directly to Salisbury, a $43.82 million allocation of Project costs was included in the forward capital works program in the Salisbury 2016/17 Annual Plan and Long Term Financial Plan (LTFP).

6.3.3 The 2017/18 LTFP has a closing net debt position of $6.939 million at the end of FY2018 increasing to a net debt position of $12.096 million at the end of FY2019 and then increasing to a positive position of $42.039 million at the end of the ten year modelled period in 2027.

6.3.4 The estimated capital cost of the Project is expected to be approximately 45% of forecast capital and renewal expenditure in FY2018 and 27% in FY2019.

6.3.5 The Project coupled with Council’s other capital works projects will result in borrowings of $21.831 million in 2017/18 and $11.133 million in 2018/19. This results in Council’s Net Financial Liabilities Ratio increasing to 30.1% in 2017/18 and peaking at 38.7% in 2018/19 marginally below Council’s endorsed operating range of <40%.

6.3.6 The ability for Council to borrow and service the debt to fund its Capital Works program is provided for within the LTFP with the Net Financial Liabilities Ratio remaining within Council’s endorsed operating range over the 10 year life of the Plan.

6.3.7 Given the relatively high level of capital cost attributable to the Project as a percentage of the total capital works budget, the Salisbury Community Hub Project will have a material impact on Salisbury’s financial indicators. However, this impact has been planned for and is reflected in the Salisbury LTFP.


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7. PROJECT RISK AND MITIGATION STRATEGIES



7.1 Risk Management

7.1.1 This report assesses the risk management actions taken or being considered by Salisbury for the Salisbury Community Hub Project.

7.1.2 The City of Salisbury has a Governance Framework and Statement in place dated November 2013. This demonstrates the City of Salisbury’s commitment to maintaining a robust and integrated Corporate Governance Framework that assures stakeholders that the City is pursuing its objectives and fulfilling its responsibilities with due diligence and accountability.

7.1.3 The Governance Framework (Section 3) provides a summary of the overarching governance hierarchy and the policies, processes and culture that will enable the Council and the CEO to ensure they:

Provide effective and accountable strategic leadership; and

Exercise effective control over the operations of the City.

7.1.4 Salisbury has also adopted a Risk Management Charter, within this it has developed and tailored a methodology consistent with the International Standard for Risk Management, AS/NZS/ISO31000:2009 for the identification and management of risk. This methodology is integrated into Salisbury’s projects, business and corporate planning and review processes.

7.1.5 The Charter establishes that any risk which falls within the “Extreme” quadrant of the Risk Matrix exceeds the City’s risk tolerance and specific action must be taken immediately to mitigate this level of risk or consideration should be given to abandoning the program, process or activity.

7.1.6 A risk workshop with the Design/Consultant Team was conducted on 8 June 2017 which resulted in an update to the initial Project Risk Register.

7.1.7 Based on the updated Project Risk Register, Table Eight shows the number of identified risks per risk category and their inherent risk rating.


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Table Eight: Inherent Risk Assessment Category Summary

Risk Level Extreme Very High

High Medium Low Total

Time 4 2 1 7

Procurement 1 1 1 3

Cost 2 2

Approvals 3 2 5

Scope 1 1

Communications 1 1

Quality 2 1 3

Construction 2 2

Safety 1 1

Total 0 1 15 7 2 25

7.1.8 Based on the updated Project Risk Register, Table Nine shows the number of

identified risks per risk category and their residual risk rating.

Table Nine: Residual Risk Assessment Category Summary

Risk Level Extreme Very High

High Medium Low Total

Time 2 2 3 7

Procurement 1 2 3

Cost 2 2

Approvals 2 1 2 5

Scope 1 1

Communications 1 1

Quality 2 1 3

Construction 2 2

Safety 1 1

Total 0 0 5 11 9 25

7.1.9 In total, 25 risks have been identified, 15 of which have an inherent risk rating of ‘High’

and one of which is rated as ‘Very High’. Post recommended risk mitigation strategies, the number of risks with a ‘High’ risk rating is five. There were no risks which were rated as ‘Extreme’ risks.


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7.2 Risk Mitigation

7.2.1 Successful resolution of the contractual matters relating to the land acquisition will remove two of the risk which are rated as ‘High’.

7.2.2 The critical risk mitigation strategies relate to procurement, project delivery and cost overruns. The proposed procurement strategy mitigates Council’s risks by ensuring an appropriate Governance Structure for the Project including engaging with suitably qualified and experienced contractors to implement the Project.

7.2.3 Salisbury should ensure that all the mitigation strategies identified in the Project Risk Register for the risks associated with the Salisbury Community Hub are implemented and that these are progressively updated as the Project is implemented.

7.2.4 The Project Risk Register should be reviewed at regular intervals during the Project to ensure risk is regularly considered and monitored and that appropriate mitigations strategies are put in place as the Project is delivered. This should include reviewing and expanding upon the Project Risk Register for any omissions, in light of their more detailed knowledge of the Project reviewing the assessment of likelihood and severity of the identified risks and reviewing the identified mitigation strategies.

7.2.5 Regular reporting of the Project Risk Register to the Project Control Group and subsequent project progress reporting to the Works and Services Sub-Committee together with quarterly budget reviews appear to be adequate to ensure the Chief Executive Officer, or his delegate, and Council are apprised of areas of risk.


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8. PROJECT DELIVERY


(i) the most appropriate mechanisms or arrangements for carrying out the project.

8.1 Delivery Mechanism

8.1.1 The delivery of the Salisbury Community Hub Project has two distinct phases:

8.1.1.1 Pre-Novation Design Team; and

8.1.1.2 Design and Construct (D&C) Contractor Post-Novation.

8.1.2 The updated Salisbury Community Hub Governance Structure – October 2016 (endorsed by Council’s Policy and Planning Committee at its meeting on 12 December 2016) is the relevant document which details the proposed governance structure for the Project.

8.1.3 This document establishes an external Project Control Group (PCG), Project Client Representative (PCR), Internal Council Working Group, Design Team and a preferred delivery model based around a novated Design and Construct arrangement.

8.1.4 A Design Team commenced on 20 March 2017 with the Salisbury Community Hub Design Brief distributed on 20 March 2017. The purpose of the Design Brief is to provide the Design Team with a foundation to build a common understanding to begin the detailed design process, clearly articulate Council’s aspirations for the building and set out the minimum requirements to be delivered.

8.1.5 The expectation is that the Design Team use the Design Brief to develop a clear understanding of the Project that will be presented to Council in the form of a Return Brief for formal endorsement.

8.1.6 The Return Brief will then be refined into a Functional Design Brief by the Design Team that will also require endorsement by Council.

8.1.7 The Functional Design Brief, once endorsed, will form a critical part of the Principal’s Project Requirements for the Design and Construct phase of the Project.

8.1.8 Once the revised program is agreed the Design Team will deliver the Project as per the endorsed Master Program.

8.1.9 The Design Team will be novated to the Design and Construct Contractor once Council has appointed the same. The Project Cost Manager, Superintendent and a third Party Design Quality Audit Team will remain contracted to Council for the duration of the project.

8.1.10 A decision making matrix has been developed to provide the Design Team an indication of the groups that are responsible for different decisions across the Project lifespan.


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8.1.11 The Salisbury Community Hub project has a set of Key Result Areas (KRAs) with performance assessed at each Project Control Group meeting, as well as at the conclusion of each milestone project phase. Both the Design Team and Design and Construct contractor, once appointed, will provide written submissions detailing progress against each of the KRAs.

Table Ten: Salisbury Community Hub Key Result Areas (KRAs)

KRAs Description

Time Compliance with Project Master Program endorsed by Council on 19 December 2016, as follows:

Separable Portion A – Practical Completion (construction of Hub including Civic Square upgrades and adjacent streetscape upgrades) – 14 May 2019

Relocation of staff and Library to new Salisbury Community Hub – 6 June 2019

Separable Portion B – Practical Completion (demolition of existing Civic Centre and construction of new Long Term carpark) – 19 September 2019

Cost Delivering the Project within the Council endorsed Project Budget of $34.8M exclusive of GST

Value for money Project outcomes are premised on the endorsed project vision, shaping principles and objectives. Implementation of design solution tested during Value Management Workshops and subsequently endorsed by Council considering capital vs operating comparisons

Stakeholder Management

Identified external stakeholders are kept informed of project progress and are offered an opportunity to contribute to the success of the project

Internal Communication

City of Salisbury staff and Elected Members are kept informed of project progress and have been offered an opportunity to contribute to the success of the project in accordance with the change management and consultation plan

Safety Safety management processes are implemented throughout the project as per Work Health and Safety Act 2012 (SA)

Team Culture & Relationships

Achieving a positive and collaborative team culture. Team members are focused on achieving project objectives

Northern Adelaide Economic Benefit

Project optimises the use of local northern region service and suppliers (subject to cost and value parameters) in accordance with Council’s endorsed Procurement Policy, specifically principle 6 – Sustainable Procurement

8.1.12 Salisbury has further mitigated its risks by including predetermined and defined

Project Hold Points which will afford Council an opportunity to assess the development of the design as well as the engagement of the third party Design Team prior to the issue of a D&C tender. The key hold points are shown in Table Eleven.


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Table Eleven: Master Program Hold Points

Project Phase Hold Point Description

Design Brief and Concept Design Phase

Return Brief endorsement by the City of Salisbury.

Endorsement of Concept Design Report and drawings by the City of Salisbury.

Design Development Phase

Endorsement of Design Development Report and drawings by the City of Salisbury.

Detailed Tender Drawings Phase

Endorsement of Detailed Tender Drawings, Cost Manager Pre Tender Estimate and the Principal’s Project Requirements by the City of Salisbury.

Design and Construct Contractor Engagement

Endorsement of preferred Design and Construct Contractor.

8.1.13 The Design Team will overlay the master program with the detailed program and

present the consolidated version to the Council for endorsement. Key dates detailed in the master program for the commencement and conclusion of the various project phases are to be met and not varied unless approved by Council.

8.2 Construction works

8.2.1 There are several options generally available for carrying out the construction phase of the Project, each of these has different advantages and disadvantages depending on the circumstances of a particular project. The methods relevant to the Project include:

Construct only;

Design and Construct; and

Managing Contractor or Early Contractor Involvement.

8.2.2 In accordance with the endorsed Salisbury Community Hub Governance Structure Council’s Administration engaged Turner Townsend and Thinc Pty Ltd (TTT) as its Project Client Representative (PCR). In their Procurement Strategy Report endorsed by the Executive Group on 11 October 2016 TTT advised that given the complexity, scale, value and significance of this project to Council, including their desire that the new facility be operational in the first quarter of 2019 the adoption of a Design and Construct model is considered appropriate on the basis that the Project quality measures detailed in the Report are implemented.

8.3 Procurement Implications

8.3.1 In accordance with the provisions of Section 49 of the Local Government Act 1999 Council has prepared and adopted the City of Salisbury Procurement Policy, last reapproved on 27 January 2015 (Decision Number 0124/2015). This Policy applies to all Council staff and personnel engaged by Council to undertake procurement activities on its behalf, and it relates to all procurement activities associated with the acquisition of Goods, Works or Services of any value by the City of Salisbury.


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8.3.2 The Policy prescribes that the procurement method for obtaining goods, works and services will be determined according to the estimated cost across the total life of a project; the nature of the procurement and the risk profile of the project. Subject to the estimate of total costs, the procurement method may be by oral quotes, written quotes or by a range of tender process options aligning to the formal procurement thresholds.

8.3.3 The Procurement Policy identifies seven key principles relating to procurement:

Value for money (as opposed to lowest price);

Open and effective competition;

Ethical behaviour and fair dealing;

Accountability and transparency;

Environmental Preference;

Sustainable procurement; and

Work health and safety.

8.3.4 Given the nature and the scale of the Project and the requirements of the existing Salisbury Procurement Policy, TTT, as Council’s Project Client Representative for the Project developed a Procurement Strategy which was endorsed by the Executive Group at its meeting on 11 October 2016. The endorsed strategy provides for three separate procurement processes:

Pre-Novation Design Team;

Design and Construct (D&C) Contractor Post-Novation; and

Engagement of other consultants.

8.3.5 The procurement for the Design Team, as well as the Design and Construct contractor will be a two stage process; a Request for Expressions of Interest as the first stage, and subsequent Request for Tender thereafter.

(a) The adoption of this procurement strategy allows Council to approach the open market, assess the submissions received and form a smaller and select tender field for the second stage.

(b) This provides for a more efficient process for both Council and the market place.

(c) The engagement of other consultants will be by a competitive request for tender process.

8.3.6 It is noted that Council will require Provisional Development Plan Consent prior to the award of any Design and Construct contract.


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8.3.7 Salisbury’s risk is that once the Design and Construct contractor is appointed they will have limited ability to influence the design development process.

8.3.8 It is intended that the disposal process for land or other assets identified as part of this Project will be outlined in a future report to Council prior to release. As this is not community land classified it falls outside Salisbury’s existing policies, however it is intended that the process adopted will be generally consistent with the Disposal of Community Land Policy.


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9. CONCLUSION

9.1 This report has been prepared to meet the requirements of Section 48 of the Local Government Act and the Salisbury Prudential Management Policy in order to provide Council with a comprehensive understanding of the prudential issues relating to the proposed construction of the Salisbury Community Hub.

9.2 The Salisbury Community Hub Project involves the construction of a new building within the Salisbury City Centre, located with a significant frontage onto the Civic Square with direct road frontage to James and John Streets, to serve as the Council’s customer and community services centre, incorporating civic spaces, council chambers, foyer/gallery, community accessible meeting areas and a learning and information centre (modern interpretation of a library) along with a functional office space for the Council’s administration.

9.3 The Salisbury Community Hub Project is considered to be strongly aligned with the City of Salisbury strategic direction and the desired outcomes as outlined within the Salisbury City Plan 2030. It will assist to advance three of the four key directions identified in the Plan. The Project would also assist to advance a number of the state priorities and targets, particularly in relation to the State Strategic Plan’s “Our Community” and “Our Prosperity” objectives and the Northern Economic Plan.

9.4 Adequate financial provisions for the Project were made in the 2016/17 Annual Plan, Budget and Long Term Financial Plan which have been carried over into the 2017/18 Annual Plan, Budget and Long Term Financial Plan. The Buildings Asset Management Plan will need to be amended to include the decommissioning and disposal of parcels of the Len Beadell Library and Civic Centre and Council Offices at 12 James Street as well as for the construction of the new Salisbury Community Hub.

9.5 The Salisbury Community Hub Project involves works which are defined as “development” under the Development Act 1993. Council has determined to make application for Development Plan Consent to the Minister for Planning. The proposed land use and development is consistent with the Objectives of the City of Salisbury Development Plan for the Salisbury City Centre Urban Core Zone.

9.6 Based on economic modelling, the Project is estimated to have a positive economic impact in the region generating an increase in economic output of over $65.523 million from the $32.739 million investment in construction works. The Project is estimated to have an impact of up to 150 jobs through direct, industrial and consumption effects.

9.7 The Project is likely to have a negative impact on businesses operating in the proximity during the construction phase due to limited access and disruption in the area surrounding the Project. Minimising the short term impact on businesses in the proximity should be given a high priority by the Project team. Once the construction phase of the Project is complete, it is likely to have a positive impact on businesses in the proximity due to increased amenity and the intended mixed use development.

9.8 While the initial schedule of areas for the facility provides for 400m2 of expansion capacity which could be leased until required by Council and given the nature of the activities proposed for the Community Hub we do not consider that any material competition issues will arise from the Project.


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9.9 Public Consultation on the broader Salisbury City Centre Renewal Strategy has occurred over the last few years which has informed the vision, location and concept for the Salisbury Community Hub. In addition, the Salisbury Community Hub project has been flagged within the 2016/17 and 2017/18 Annual Plan consultations.

9.10 Given the confidentiality issues associated with the acquisition of the required land to enable the Salisbury Community Hub Project it has not been possible to consult with stakeholders on the location or specific details of the Project. However, consultation relating to uses and the feel for a facility within the Salisbury City Centre, in an undisclosed location, was held with Council advisory groups in May 2017 to inform early concept work. All future communication and consultation should be conducted in accordance with Council’s Public Consultation Policy as soon as the confidentiality provisions have been satisfied and the location of the site and Project have been made public.

9.11 The major financial risk of the Project relates to the potential for cost overruns in the construction process given that the estimated capital cost of the Project is expected to be approximately 45% of forecast capital and renewal expenditure incurred by Salisbury during FY2018 and 27% in FY2019. Salisbury can mitigate this risk through the implementation of the approved Salisbury Community Hub Governance Structure and Procurement Strategy.

9.12 The Project coupled with Council’s other capital works projects will result in borrowings of $21.831 million in 2017/18 and $11.133 million in 2018/19. This results in Council’s Net Financial Liabilities Ratio increasing to 30.1% in 2017/18 and peaking at 38.7% in 2018/19 marginally below Council’s endorsed operating range of <40%. The ability for Council to borrow and service the debt to fund its Capital Works program is provided for within the LTFP with the Net Financial Liabilities Ratio remaining within Council’s endorsed operating range over the 10 year life of the Plan.

9.13 Given that the hub concept and building area are still to be refined the whole of life Project costs are based on a high level order of costs estimate of the additional maintenance, depreciation and notional finance costs relating to construction of the Salisbury Community Hub on the preferred site. These have been estimated at approximately $43.355 million over the assumed 15 year analysis period.

9.14 A Project Risk Register has been developed and is regularly reviewed and updated for reporting to the Project Control Group and Council. As a result of the formal risk workshop conducted with the Design/Consultant Team on 8 June 2017, 25 risks were identified, 15 of which have an inherent risk rating of ‘High’ and one which is rated as ‘Very High’. Post the implementation of the recommended risk mitigation strategies, it has been assessed that there are five risks with a residual risk rating of ‘High’. Salisbury should continue to actively review and update the Project Risk Register as the Project progresses.

9.15 Given the complexity, scale, value and significance of this project to Council, including their desire that the new facility be operational in the first quarter of 2019, the adoption of a Design and Construct model is considered appropriate as verified by Council’s Project Client Representative Administration, Turner Townsend and Thinc Pty.

9.16 The procurement methods outlined in the approved Procurement Strategy are considered to be consistent with the Salisbury Procurement Policy.


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ATTACHMENT ONE: LOCAL GOVERNMENT ACT, 1999 – SECTION 48

Section 48 – Prudential requirements for certain activities

(1) A council must obtain and consider a report that addresses the prudential issues set out in subsection (2) before the council—

(a) engages in a commercial project (including through a subsidiary or participation in a joint venture, trust, partnership or other similar body) where the expected recurrent or capital expenditure of the project exceeds an amount set by the council for the purposes of this section; or

(b) engages in any project (whether commercial or otherwise and including through a subsidiary or participation in a joint venture, trust, partnership or other similar body)—

(i) where the expected expenditure of the council over the ensuing five years is likely to exceed 20 per cent of the council's average annual operating expenses over the previous five financial years (as shown in the council's financial statements); or

(ii) where the expected capital cost of the project over the ensuing five years is likely to exceed $4,000,000.

(2) The following are prudential issues for the purposes of subsection (1):









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(i) the most appropriate mechanisms or arrangements for carrying out the project.

(3) A report is not required under subsection (1) in relation to—

(a) road construction or maintenance; or

(b) drainage works.

(4) A report under subsection (1) must be prepared by a person whom the council reasonably believes to be qualified to address the prudential issues set out in subsection (2).

(4a) A report under subsection (1) must not be prepared by a person who has an interest in the relevant project (but may be prepared by a person who is an employee of the council).

(4b) A council must give reasonable consideration to a report under subsection (1) (and must not delegate the requirement to do so under this subsection).

(5) A report under subsection (1) must be available for public inspection at the principal office of the council once the council has made a decision on the relevant project (and may be available at an earlier time unless the council orders that the report be kept confidential until that time).

(6) However, a council may take steps to prevent the disclosure of specific information in order to protect its commercial value or to avoid disclosing the financial affairs of a person (other than the council).

(6a) For the purposes of subsection (4a), a person has an interest in a project if the person, or a person with whom the person is closely associated, would receive or have a reasonable expectation of receiving a direct or indirect pecuniary benefit or a non-pecuniary benefit or suffer or have a reasonable expectation of suffering a direct or indirect detriment or a non-pecuniary detriment if the project were to proceed.

(6b) A person is closely associated with another person (the relevant person)—

(a) if that person is a body corporate of which the relevant person is a director or a member of the governing body; or

(b) if that person is a proprietary company in which the relevant person is a shareholder; or

(c) if that person is a beneficiary under a trust or an object of a discretionary trust of which the relevant person is a trustee; or

(d) if that person is a partner of the relevant person; or


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(e) if that person is the employer or an employee of the relevant person; or

(f) if that person is a person from whom the relevant person has received or might reasonably be expected to receive a fee, commission or other reward for providing professional or other services; or

(g) if that person is a relative of the relevant person.

(6c) However, a person, or a person closely associated with another person, will not be regarded as having an interest in a matter—

(a) by virtue only of the fact that the person—

(i) is a ratepayer, elector or resident in the area of the council; or

(ii) is a member of a non-profit association, other than where the person is a member of the governing body of the association or organisation; or

(b) in a prescribed circumstance.

(6d) In this section, $4 000 000 (indexed) means that that amount is to be adjusted for the purposes of this section on 1 January of each year, starting on 1 January 2011, by multiplying the amount by a proportion obtained by dividing the CPI for the September quarter of the immediately preceding year by the CPI for the September quarter, 2009.

(6e) In this section—

employee of a council includes a person working for the council on a temporary basis;

non-profit association means a body (whether corporate or unincorporate)—

(a) that does not have as its principal object or 1 of its principal objects the carrying on of a trade or the making of a profit; and

(b) that is so constituted that its profits (if any) must be applied towards the purposes for which it is established and may not be distributed to its members.

(7) The provisions of this section extend to subsidiaries as if a subsidiary were a council subject to any modifications, exclusions or additions prescribed by the regulations.


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ATTACHMENT TWO: RLB PROJECT COST ESTIMATES

*Costs have been rounded com*Costs have been rounded compared to RLB cost management estimate (July 2016) and exclude Professional fees, Design and Construction contingency allowances, Statutory charges, decanting and post occupancy costs and removal of existing transformer from the project site.

^All figures include design /preliminaries and contingency allowances and cost assumptions respond to escalation through to 2018.

Element

Approved Project budget

2016/17 – hypothetical location ($)

Option 1

Civic Square site July 2016 ($)

Option 2

Sexton carpark July 2016 ($)

Demolition and site preparation 698,000 318,410 178,200

Site infrastructure 830,000 1,181,600 607,350

Building works/fitout 35,290,000 39,385,150 39,237,600

ICT allowance 702,000 500,000 500,000

Decanting and relocation 140,000 105,400 105,400

Open space and streetscape upgrade

2,300,000 1,757,800 2,285,900

Sub-total 39,960,000 43,248,360 42,914,450

Operating sunk cost 250,000

Demolition 12 James St 1,000,000 600,000 600,000

Carpark at grade 456,500 610,500

Carpark single deck 2,610,000

Total 43,820,000* 44,304,860^ 44,124,950^

Land acquisition 2,750,000

section 48 prudential report salisbury community hub · the project scope involves the design and...

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