Agenda of Finance and Governance Committee Meeting

Agenda (Open Portion)

Finance and Governance Committee Meeting

Page 5

24/5/2022

Finance and Governance Committee Meeting (Open Portion) held Tuesday, 24 May 2022 at 4.30 pm in the Council Chamber, Town Hall.

This meeting of the Finance and Governance Committee is held in accordance with a Notice issued by the Premier on 3 April 2020 under section 18 of the COVID-19 Disease Emergency (Miscellaneous Provisions) Act 2020.

The title Chief Executive Officer is a term of reference for the General Manager as appointed by Council pursuant s.61 of the Local Government Act 1993 (Tas).

COMMITTEE MEMBERS

Alderman M Zucco (Chairman)

Deputy Lord Mayor Councillor H Burnet

Alderman Dr P T Sexton

Alderman D C Thomas

Councillor W Coats

NON-MEMBERS

Lord Mayor Councillor A M Reynolds

Alderman J R Briscoe

Councillor W Harvey

Alderman S Behrakis

Councillor M Dutta

Councillor J Fox

Councillor Dr Z Sherlock

Apologies:

Leave of Absence:

Alderman Dr P T Sexton

Alderman D C Thomas

1. Co-Option of a Committee Member in the event of a vacancy

2. Confirmation of Minutes

The minutes of the Open Portion of the Finance and Governance Committee meeting held on Wednesday, 27 April 2022 and the Special Finance and Governance Committee meeting held on Monday, 16 May 2022, are submitted for confirming as an accurate record.

3. Consideration of Supplementary Items

Ref: Part 2, Regulation 8(6) of the Local Government (Meeting Procedures) Regulations 2015.

Recommendation

That the Committee resolve to deal with any supplementary items not appearing on the agenda, as reported by the Chief Executive Officer.

4. Indications of Pecuniary and Conflicts of Interest

Ref: Part 2, Regulation 8(7) of the Local Government (Meeting Procedures) Regulations 2015.

Members of the Committee are requested to indicate where they may have any pecuniary or conflict of interest in respect to any matter appearing on the agenda, or any supplementary item to the agenda, which the Committee has resolved to deal with.

5. Transfer of Agenda Items

Regulation 15 of the Local Government (Meeting Procedures) Regulations 2015.

A Committee may close a part of a meeting to the public where a matter to be discussed falls within 15(2) of the above regulations.

In the event that the Committee transfer an item to the closed portion, the reasons for doing so should be stated.

Are there any items which should be transferred from this agenda to the closed portion of the agenda, or from the closed to the open portion of the agenda?

Item No. 6.1

Agenda (Open Portion)

Finance and Governance Committee Meeting

Page 8

24/5/2022

REPORT TITLE: Financial Report as at 31 March 2022

REPORT PROVIDED BY: Chief Financial Officer

Acting Director City Enablers

1. Report Purpose and Community Benefit

1.1. The purpose of this report is to provide the year to 31 March 2022 financial results and to seek approval for changes to the 2021-22 Estimates (budget).

2. Report Summary

2.1. As at 31 March 2022, the forecast for the year end underlying result is a surplus of $2.102M. This exceeds the original budget forecast surplus of $1.493M by $0.609M and the December forecast by $1.039M.

2.2. The reason for the improved position compared to the December revised budget is an improved revenue forecast of $0.988M which is primarily due to increased rates and charges attributable to growth in the rate base driven by development in the city.

2.3. In addition, expenditure is forecast to reduce by $0.052M as a result of transfers to the capital works program.

3. Recommendation

That:

1. The financial report for the nine month period ending 31 March 2022, be noted.

2. The changes to the Council’s 2021-22 Estimates as detailed in the following tables be approved.

(i) Operational Budget reallocations and amendments:

(ii) Capital works program re-allocations and changes:

3. Capital Works, as detailed in the table included in section 4.8 of the report, attached to the Finance and Governance Committee agenda of 24 May 2022, and totalling $19.083M, be deferred for completion in the 2022-23 financial year.

4. Background

4.1. Following a detailed analysis of the Council’s financial position it has been identified that, based on the figures as at 31 March 2022, the forecast for the year end underlying result is a surplus of $2.102M.

4.2. These figures continue to be high level forecasts based on updated date as it becomes available.

4.3. The reasons for the $1.040M improvement in the forecast underlying result are reflected in the following Income Statement:

Capital Expenditure

4.4. As has been the case for the first two quarters, the capital works and Plant and Equipment spend to 31 March 2022 is trending behind budget.

4.5. Actual Plant and Equipment year to date expenditure only amounts to 6.4% of the annual budget, however the addition of committed expenditure increases this to 56%.

4.6. Capital works expenditure for the year is 26.8% of the annual budget, and with the inclusion of commitments this increases to 41.8%. While the addition of commitments provides a more accurate reflection of progress on capital works and Plant and Equipment purchases, some commitments may have a long lead time and therefore may not yet be incurred.

4.7. This report requests the re-allocation of capital budget funds between projects and to seeks approval to increase the capital works program by $0.159M, namely:

4.8. Significant work has been undertaken to identify projects that (for a number of reasons) cannot be delivered by 30 June 2022.

4.8.1. As a result this report seeks approval to defer $19.083M of the current year capital works budget (as detailed in the following table to the following year.

4.9. With these changes in place, the actual year to date spend (and commitments) as a percentage of the annual budget excluding the capital to be deferred sees 63.3% of the adjusted annual budget spent as at 31 March 2022.

Borrowings and Cash

4.10. Council approved additional borrowings of $5M as part of the 2021-22 Budget Estimates.

4.10.1. The Council drew down the $5M borrowing from Tascorp in August 2021 with repayment over three years. This loan meets the eligibility criteria under the grant funding deed with the State for reimbursement of interest costs on the loan.

4.11. The Council’s cash balance at 31 March 2022 was $72M. This balance is expected to decrease to around $45M at 30 June 2022 based on current forecasts.

Financial Sustainability Indicators

4.12. Council has previously adopted financial sustainability measures identified as key to securing long-term financial security. These eight financial sustainability measures are in the table below which shows the achievement of each of the measures against the year to date budget and against the medium to long term benchmark. The first two measures are measures of profitability, the next three are measures of indebtedness and the last three are measures of asset management.

4.12.1. The current forecasts in the table below are consistent with the expected outcomes adopted by Council in the 2021-22 Budget Estimates.

5. Proposal and Implementation

5.1. Following Council approval the required internal transfers will be progressed and future reports will be based on the revised allocations.

5.2. Planning associated with the deferred capital works projects will be progressed to ensure their delivery in the 2022/ 2023 financial year.

6. Financial Implications

6.1. Funding Source and Impact on Current Year Operating Result

6.1.1. As detailed earlier in this report it has been identified that the forecast for the year end underlying result is a surplus of $2.102M. This exceeds the original budget forecast surplus of $1.493M by $0.609M and the December forecast by $1.039M.

6.2. Impact on Future Years’ Financial Result

6.2.1. The funding for the deferred capital works will be transferred to a reserve and be available for the implementation of those projects in the 2022/2023 financial year.

6.3. Asset Related Implications

6.3.1. The deferred capital works will be incorporated into the City’s assets management system as individual projects are completed.

6.3.2. The uptake of the upgraded (and new) assets will be phased over an additional year than originally planned.

7. Legal, Risk and Legislative Considerations

7.1. There have been no legal, risk of legislative issues identified as a result of the recommendations contained within this report.

8. Social and Customer Considerations

8.1. Communication will take place with stakeholders to ensure community expectations are managed as a result of the proposed capital works deferrals.

9. Delegation

9.1. The recommendations contained in this report require consideration by full Council.

As signatory to this report, I certify that, pursuant to Section 55(1) of the Local Government Act 1993, I hold no interest, as referred to in Section 49 of the Local Government Act 1993, in matters contained in this report.

Fiona Dixon

Chief Financial Officer

Glenn Doyle

Acting Director City Enablers

Date: 17 May 2022

File Reference: F22/42730

Item No. 6.2

Agenda (Open Portion)

Finance and Governance Committee Meeting

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24/5/2022

REPORT TITLE: Grants and Benefits Listing as at 31 March 2022

REPORT PROVIDED BY: Manager Rates, Procurement and Finance Operations

Acting Director City Enablers

1. Report Purpose and Community Benefit

1.1. The purpose of this report is to provide a listing of the grants and benefits provided by the Council for the period 1 July to 31 March 2022.

2. Report Summary

2.1. A report outlining all grants and benefits provided by Council Committees and Council for the period 1 July to 31 March 2022 is attached.

2.2. It is proposed that the listing of grants and benefits provided for the period 1 July to 31 March 2022 be noted and that these (as required) pursuant to Section 77 of the Local Government Act 1993 (““the Act””), to be included in the annual report of Council.

3. Recommendation

That the information contained in the report titled ‘Grants and Benefits Listing as at 31 March 2022, marked as Attachment A to this report be noted.

4. Background

4.1. A report outlining the grants and benefits provided for the period 1 July to 31 March 2022 is provided at Attachment A.

4.2. Pursuant to Section 77 of “the Act”, the details of any grant made or benefit provided will be included in the Council’s Annual Report.

4.3. The listing of grants and benefits marked as Attachment A, has been prepared in accordance with the Council policy titled Grants and Benefits Disclosure.

5. Proposal and Implementation

5.1. It is proposed that the grants and benefits listing as at 31 March 2022 be noted.

5.2. The grants and benefits listed are required to be included in the Council’s Annual Report and will be listed on the City of Hobart’s website.

6. Strategic Planning and Policy Considerations

6.1. Grants and benefits are provided to organisations which undertake activities and programs that strongly align with the City’s Community Vision, the City of Hobart Capital City Strategic Plan 2019-2029 as well as other relevant City of Hobart strategies.

6.2. The linkage between the City’s grants and benefits provided and the City of Hobart Capital City Strategic Plan 2019-2029 is referenced in Attachment A.

7. Financial Implications

7.1. Funding Source and Impact on Current Year Operating Result

7.1.1. All grants and benefits provided as at 31 March 2022 were funded from the 2021-22 budget estimates.

8. Legal, Risk and Legislative Considerations

8.1. The Council provides grants and benefits within the requirements of Section 77 of “the Act” as follows:

8.1.1. Grants and benefits

(1) A council may make a grant or provide a pecuniary benefit or a non-pecuniary benefit that is not a legal entitlement to any person, other than a councillor, for any purpose it considers appropriate.

(1A) A benefit provided under subsection (1) may include:

(a) in-kind assistance; and

(b) fully or partially reduced fees, rates or charges; and

(c) remission of rates or charges under Part 9 (rates and charges)

(2) The details of any grant made or benefit provided are to be included in the annual report of the council.

8.2. Section 72 of “the Act” requires Council to produce an Annual Report with Section 77 of “the Act” providing an additional requirement where individual particulars of each grant or benefit given by the Council must be recorded in the Annual Report.

8.3. Section 207 of “the Act” provides for the remitting of all or part of any fee or charge paid or payable.

8.4. Section 129 of “the Act” provides for the remitting of rates.

9. Delegation

9.1. This report is provided to the Finance and Governance Committee for information.

Lara MacDonell

Manager Rates, Procurement and Finance Operations

Glenn Doyle

Acting Director City Enablers

Date: 18 May 2022

File Reference: F22/39546; 25-2-1

Attachment a: Grants and Benefits Listing as at 31 March 2022 ⇩

Item No. 6.3

Agenda (Open Portion)

Finance and Governance Committee Meeting

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24/5/2022

REPORT TITLE: Procurement - Quotation Exemption Report

REPORT PROVIDED BY: Manager Rates, Procurement and Finance Operations

Acting Director City Enablers

1. Report Purpose and Community Benefit

1.1. The purpose of this report is to provide a listing of exemptions from the requirement to seek three written quotations granted for the period 1 January to 31 March 2022.

1.2. Under regulation 28(j) of the Local Government (General) Regulations 2015 it is a requirement for a council to establish and maintain procedures for reporting by the Chief Executive Officer to the Council in relation to the purchase of goods or services in circumstances where a public tender or quotation process is not used.

1.3. The community benefit is providing transparency and delivering best value for money through strategic procurement decision-making.

2. Report Summary

2.1. At its meeting on 19 March 2018, the Council resolved, in line with legislative requirements that a report of exemptions granted from the requirement to seek three written quotes, be presented to the Finance and Governance Committee quarterly as at 31 March, 30 June, 30 September and 31 December each year.

2.2. A report is attached for the period 1 January to 31 March 2022.

2.3. It is proposed that the list of exemptions from the requirement to seek three written quotes granted for the period 1 January to 31 March 2022 be noted.

3. Recommendation

That the list of exemptions granted from the requirement to seek three written quotations for the period 1 January to 31 March 2022, marked as Attachment A to this report be noted.

4. Background

4.1. At its meeting on 19 March 2018, the Council resolved inter alia that:

4.1.1. A report of exemptions granted from the requirement to seek three written quotes be presented to the Finance and Governance Committee as at 31 March, 30 June, 30 September and 31 December each year.

4.2. A report outlining the quotation exemption from the requirement to seek three written quotes granted during the period 1 January to 31 March 2022 is attached – refer Attachment A.

4.3. As outlined in the City’s Code for Tenders and Contracts (the Code) where a Council Contract does not exist the City will seek a minimum of three written quotes for procurements between $50,000 and $249,999.

4.4. There may be occasions where, for a number of reasons, quotation(s) cannot be obtained / sought from the market or where doing so would have no additional benefit to the City or the market.

4.5. Therefore, exemptions from the requirement to seek written quotes can be sought from the Divisional Director but only if an acceptable justification exists as outlined in the Code, as follows:

(a) where, in response to a prior notice, invitation to participate or invitation to tender:

- no tenders were submitted; or

- no tenders were submitted that conform to the essential requirements in the tender documentation;

(b) where the goods, services or works can be supplied only by a particular supplier and no reasonable alternative or substitute goods, services or works exist for the following reasons:

- the requirement is for works of art;

- the protection of patents, copyrights or other exclusive rights or proprietary information; or

- due to an absence of market competition for technical reasons.

(c) for additional deliveries of goods, services or works by the original supplier that are intended either as replacement parts, extensions or continuing services for existing equipment, software or installations, where a change of supplier would result in the purchase of goods, services or works that do not meet requirements of interchangeability with existing goods, services or works;

(d) for goods purchased on a commodity market;

(e) where there is an emergency and insufficient time to seek quotes for goods, services or works required in that emergency;

(f) for purchases made under exceptionally advantageous conditions that only arise in the very short term, such as from unusual disposals, liquidation, bankruptcy or receivership and not for routine purchases from regular suppliers; or

(g) for a joint purchase of goods or services purchased with funds contributed by multiple entities, where Council is one of those entities and does not have express control of the purchasing decision.

4.6. For the period 1 January to 31 March there were two exemptions granted, where expenditure was between $50,000 and $249,999 and therefore three written quotations were required to be sought in line with the Code.

4.7. The first exemption was granted as a prior invitation to quote resulted in no additional quotations received. The second exemption was granted on the grounds that it was a joint purchase of goods and services purchased with funds contributed by multiple entities, where Council was one of those entities and did not have express control of the purchasing decision.

5. Proposal and Implementation

5.1. It is proposed that the Committee note the exemption granted from the requirement to seek three written quotes for the period 1 January to 31 March 2022.

5.2. As outlined in the Code, quotation exemptions for a value under $50,000, that is where one or two written quotations are required to be sought but an exemption from that requirement has been granted by the relevant Divisional Director and has been reported to the Chief Executive Officer.

5.3. All approvals for the exemptions from the requirement to Tender are sought and reported through the formal Committee / Council approval processes.

6. Strategic Planning and Policy Considerations

6.1. The City’s Code for Tenders and Contracts is referenced in this report as it provides a framework for best practice procurement and sets out how the City will meet its legislative obligations in respect to procurement, tendering and contracting.

6.2. This report is consistent with strategy 8.5.4 in the City of Hobart Capital City Strategic Plan 2019-29, being to deliver best value for money through strategic procurement decision-making.

7. Financial Implications

7.1. Funding Source and Impact on Current Year Operating Result

7.1.1. All expenditure noted in the attached listing of quotation exemptions granted was funded from the 2021-22 budget estimates.

7.2. Impact on Future Years’ Financial Result

7.2.1. Not applicable.

7.3. Asset Related Implications

7.3.1. Not applicable.

8. Legal, Risk and Legislative Considerations

8.1. Regulation 28 of the Local Government (General) Regulations 2015 states that the Council’s Code for Tenders and Contracts must (j) establish and maintain procedures for reporting by the general manager to the council in relation to the purchase of goods or services in circumstances where a public tender or quotation process is not used.

9. Delegation

9.1. This report is provided to the Finance and Governance Committee for information.

Lara MacDonell

Manager Rates, Procurement and Finance Operations

Glenn Doyle

Acting Director City Enablers

Date: 17 May 2022

File Reference: F22/41887; 18/311

Attachment a: Report - Quotation Exemptions Granted (3 Quotes) 1 January to 31 March 2022 ⇩

Item No. 8.1

Agenda (Open Portion)

Finance and Governance Committee Meeting

Page 42

24/5/2022

memorandum: Lord Mayor
Deputy lord Mayor
Elected members

Committee Meeting - Attendance

Meeting: Community, Culture and Events Committee

Meeting date: 3 March 2022

Raised by: Councillor Dutta

Question:

Can the Director advise how many committee meetings an elected member can miss, is there a Council policy on this?

Response:

The Meetings: Procedures and Guidelines Policy does not address non-attendance at council committee meetings, nor does any other Council policy.

Clause 3(1)(c) of Schedule 5 of the Local Government Act 1993 (“the Act”) states that the office of an elected member becomes vacant if the elected member is absent without leave from 3 consecutive ordinary meetings of the Council.

Section 72(1)(cc) of the Act states that a council must prepare an annual report containing a statement detailing the attendance of each councillor at meetings of the council or any council committee during the preceding financial year.

The Act and Local Government (Meeting Procedures) Regulations 2015 are otherwise silent with respect to any repercussions for non-attendance at council committee meetings.

Paul Jackson

Manager Legal and Governance

Date: 17 May 2022

File Reference: F22/21083; 13-1-10

Agenda (Open Portion)

Finance and Governance Committee Meeting

Page 43

24/5/2022

9. Questions Without Notice

Section 29 of the Local Government (Meeting Procedures) Regulations 2015.

File Ref: 13-1-10

An Elected Member may ask a question without notice of the Chairman, another Elected Member, the Chief Executive Officer or the Chief Executive Officer’s representative, in line with the following procedures:

1. The Chairman will refuse to accept a question without notice if it does not relate to the Terms of Reference of the Council committee at which it is asked.

2. In putting a question without notice, an Elected Member must not:

(i) offer an argument or opinion; or

(ii) draw any inferences or make any imputations – except so far as may be necessary to explain the question.

3. The Chairman must not permit any debate of a question without notice or its answer.

4. The Chairman, Elected Members, Chief Executive Officer or Chief Executive Officer’s representative who is asked a question may decline to answer the question, if in the opinion of the respondent it is considered inappropriate due to its being unclear, insulting or improper.

5. The Chairman may require a question to be put in writing.

6. Where a question without notice is asked and answered at a meeting, both the question and the response will be recorded in the minutes of that meeting.

7. Where a response is not able to be provided at the meeting, the question will be taken on notice and

(i) the minutes of the meeting at which the question is asked will record the question and the fact that it has been taken on notice.

(ii) a written response will be provided to all Elected Members, at the appropriate time.

(iii) upon the answer to the question being circulated to Elected Members, both the question and the answer will be listed on the agenda for the next available ordinary meeting of the committee at which it was asked, where it will be listed for noting purposes only.

Agenda (Open Portion)

Finance and Governance Committee Meeting

Page 44

24/5/2022

10. Closed Portion Of The Meeting

RECOMMENDATION

That the Committee resolve by majority that the meeting be closed to the public pursuant to regulation 15(1) of the Local Government (Meeting Procedures) Regulations 2015 because the items included on the closed agenda contain the following matters:

· Minutes of a Closed Committee meeting.

· Lease Agreement of Council Property

· Closed Questions Without Notice

The following items are listed for discussion:-

Item No. 1 Minutes of the last meeting of the Closed Portion of the Committee Meeting

Item No. 2 Consideration of supplementary items to the agenda

Item No. 3 Indications of pecuniary and conflicts of interest

Item No. 4 Reports

Item No. 4.1 Lease Agreement - Level 4 Council Centre Building - Enterprize Tasmania Ltd

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