773

Adopted Report of the Special Budget & Finance Committee Meeting held on Monday 13 May 2019 at 9am

City of Gold Coast Council Chambers 135 Bundall Road Surfers Paradise 773rd Council Meeting 14 May 2019 2 Special Budget & Finance Committee Meeting 13 May 2019 Adopted Report

Index Adopted Report Special Budget & Finance Committee Meeting Monday 13 May 2019

Item Direct. File Page Subject

1 OCOO FN334/375/20(P1) 4 March 2019 Monthly Financial Report

2 WW FN334/252/19(P8) 14 Waste and Sewerage Services March 2019 Budget Review

3 WW FN334/252/19(P8) 38 Waste Services March 2019 Budget Review

4 LC FN334/375/20(P1) 56 Tourist Parks March 2019 Budget Review

Closed Session

5 OCOO FN334/375/20(P1) 77 March 2019 Budget Review

Open Session

6 OCEO FN334/375/21(P1) 337 Confidentiality of Draft 2019-20 Budget Documents

Closed Session

7 External Presentation (2019-20 Budget) Note: This is a presentation only, with Study Gold Coast Funding to be considered at the Special Budget & Finance Committee meeting on 20 May 2019.

10.25am Study Gold Coast

8 OCOO LG343/1045/13/01(P1) 342 Total Asset Management Plan

KEY: OCEO - Office of the Chief Executive Officer OCOO Office of the Chief Operating Officer EPE - Economy, Planning and Environment OS - Organisational Services LC - Lifestyle and Community TI - Transport and Infrastructure WW - Water and Waste

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ADOPTED BY COUNCIL 14 MAY 2019

RESOLUTION G19.0514.022 moved Cr Tate seconded Cr PJ Young

That the Report of the Special Budget and Finance Committee’s Recommendations of Monday 13 May 2019, number SBF19.0513.001 to SBF19.0513.007, be adopted.

CARRIED

ATTENDANCE

Cr T R Tate (Chairperson) Cr D Gates Cr W M A Owen-Jones Cr C M Caldwell Cr K L Boulton Cr P J Young Cr D M Crichlow OAM Cr G J Baildon AM Cr R La Castra Cr G M Tozer Cr P A Taylor Cr H H C Vorster Cr P C Young Cr D I McDonald Cr G M O’Neill

Mr D Dickson Chief Executive Officer Mr A J McCabe Chief Operating Officer Mr A Twine Director Transport and Infrastructure Ms A Ewens Director Lifestyle and Community Mr P Heaton Director Water and Waste Mr G Potter Director Organisational Services Ms A Swain Director Economy Planning and Environment

Mr J Blair Manager Corporate Finance

APOLOGY / LEAVE OF ABSENCE

PRESENTATIONS

External Presentations (2019-20 Budget)

10.25am Study Gold Coast The Hon. Rob Borbidge AO (Chairman) Mr Alfred Slogrove (Chief Executive Officer)

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ITEM 1 OFFICE OF THE CHIEF OPERATING OFFICER MARCH 2019 MONTHLY FINANCIAL REPORT FN334/375/20(P1) Refer Attachment 1: 2018-19 Special Purpose Statement of Income and Expenditure and Special Purpose Statement of Financial Position – March 2019

1 BASIS FOR CONFIDENTIALITY

Not Applicable.

2 EXECUTIVE SUMMARY

Not Applicable.

3 PURPOSE OF REPORT

The Local Government Act 2009 and the Local Government Regulation 2012 require the Chief Executive Officer to present a financial report to Council on a monthly basis. The attached report is provided to Council in accordance with the above statutory requirements for March 2019.

4 PREVIOUS RESOLUTIONS

Not Applicable.

5 DISCUSSION

Monthly financial reporting to Council is specified under section 204 of the Local Government Regulation 2012. It requires the Chief Executive Officer to present a financial report to Council on a monthly basis, stating the progress that has been made in relation to the local government’s budget. To aid in understanding the budget to actual position a Special Purpose Statement of Income and Expenditure and Special Purpose Statement of Financial Position are provided in Attachment 1. The purpose of each statement is summarised below:

Special Purpose Statement of Income and Expenditure - The Statement of Income and Expenditure measures Council’s performance over the year and includes all sources of income and all operating expenses. A favourable net result indicates Council is increasing its community equity, i.e. net accumulated financial worth. Combined Statements of Income and Expenditure for Gold Coast Water, Waste Management, Tourist Parks and Other Council Activities are also provided in Attachment 1.

Special Purpose Statement of Financial Position - The Statement of Financial Position sets out Council’s net accumulated financial worth at a point in time. It shows the assets that Council holds as well as liabilities or claims against these assets.

These special purpose financial statements are prepared for Council in satisfaction of the statutory requirement noted above. They are extracted directly from the financial system after each month is closed, so the amounts shown in the report reflect unaudited account balances. On rare occasions the report may reflect an adjusted amount, where material errors or omissions in the financial system are known and quantifiable.

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ITEM 1 (Continued) MARCH 2019 MONTHLY FINANCIAL REPORT FN334/375/20(P1)

2018-19 Basis of Reporting & Trend Analysis

The budget figures presented in this report as at 31 March 2019 represents the 2018-19 December Budget Review position, after reprovisions.

As part of the monthly reporting process, Directorates are requested to identify significant budget trends. A trend is generally caused by an external influence beyond Council’s control (e.g. legislative, economic/financial markets, weather, etc.) and could potentially result in a variation to the level of service provided by Council. Budget variations are considered in the budget review process.

There are no trends to report for March 2019.

2018-19 Year to Date Progress and Comparative Analysis

Progress against capital and operating budgets can be expressed in a series of high level indicators as provided below. These indicators show that revenue and expenditure are generally within expectations at this point in the financial year.

When reviewing the budget to actual position on the statements it should be noted that Council’s budget is prepared on an annual basis, whereas actual figures are presented on a progressive monthly basis. Pro rata comparisons may not be appropriate because actual results may not occur evenly throughout the year, for example when they are influenced by seasonality or when works / programs are ahead of or behind schedule, or progress at a rate which is not uniform throughout the year. Such timing variances do not indicate a need for budget adjustment. Examples of variances which should be addressed through budget adjustments are: o planning variances where the intended program / outputs have changed; o cost/efficiency variances, such as savings or over-expenditure, that will not be absorbed within the budget area o price variances, where the price of inputs changed.

The graphs presented below attempt to take seasonality of budget expenditure into account by comparing actual expenditure and revenue for the year to date to a Previous Year Pattern. o The Previous Year Pattern percentage shows the percentage of last year’s total expenditure that had been spent at the corresponding time last year based on the final Revised Budget. o The Previous Year Pattern amount shows the actual reported amount at the corresponding time last year.

Previous Year Pattern for revenue is a similar calculation based on revenue received at the corresponding time last year.

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ITEM 1 (Continued) MARCH 2019 MONTHLY FINANCIAL REPORT FN334/375/20(P1)

OPERATING EXPENDITURE

The graph provides a comparison of year to date actual operating expenditure to budget for March 2019. Council has spent $724.5 million from an operating expense budget of $1,032.0 million (including reprovisions) in 2018-19. This represents 70.2% expended at 75.0% of the year elapsed. By comparison 71.2% ($735.8 million) of the previous year’s actual expenditure had been spent from the budget of $1,033.6 million at the end of March 2018.

CAPITAL EXPENDITURE

The capital expenditure graph shows a comparison of budget (plus commitments) to actual expenditure for capital works in 2018-19. At the end of March 2019 $204.9 million ($349.1 million inclusive of commitments) had been spent from a total capital budget of $518.1 million (including reprovisions). This represents 39.6% (67.4% inclusive of commitments) of the total budget with 75.0% of the year elapsed. Commitments relate to current year projects. By comparison, $229.0 million (55.8%), or $309.5 million (75.4%) inclusive of commitments, of the capital budget of $410.5 million (including reprovisions) had been spent at the end of March 2018. Reasons for the increased budget from 2017-18 to 2018-19 include: higher value of projects carried forward from the prior year including Cultural Precinct (Art Gallery and Green Bridge) and Transport trunk infrastructure works. Significant expenditure on these projects along with the Pimpama Sports Hub are still anticipated to be spent during the remainder of the year.

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ITEM 1 (Continued) MARCH 2019 MONTHLY FINANCIAL REPORT FN334/375/20(P1)

OPERATING REVENUES The graphs below present Council’s major sources of operating revenue. They show the actual year to date performance compared with total year budget and budget trend. Fees and Charges Fees and charges (excluding Private Works and Water and Waste Water Fees) were $74.8 million, which is 73.9% of the revised budget of $101.3 million as at the end of March 2019 (75.0% of year elapsed).

By comparison, $78.5 million (77.5%) of last year’s budget of $101.3 million for fees and charges revenue had been achieved by the end of March 2018. Last year’s revised budget included an increase in development fees. By comparison, these fees are $2 million lower in the December Budget Review 2018-19. Rates and Utility Charges The amount of rates and utility charges brought to account as at the end of March 2019 was $1,009.0 million, which is 86.1% of the total budget of $1,172.0 million. This amount comprises Gold Coast Water rates, which are recognised on a progressive monthly basis, and other rates, which are recognised when billed. By comparison, $951.0 million (84.6%) of last year’s total rates and utility charges revenue budget of $1,124.4 million had been achieved by the end of March 2018.

Interest Income

Interest income at the end of March 2019 was $26.6 million, which is 88.6% of the budget of $30.0 million. By comparison, $27.3 million (87.4%) of last year’s total interest revenue budget of $31.2 million had been received by the end of March 2018. The Interest Income budget was increased in the December Budget Review due to higher than anticipated opening cash balances and will be monitored in future reviews. 773rd Council Meeting 14 May 2019 8 Special Budget & Finance Committee Meeting 13 May 2019 Adopted Report

ITEM 1 (Continued) MARCH 2019 MONTHLY FINANCIAL REPORT FN334/375/20(P1)

6 ALIGNMENT TO THE CORPORATE PLAN, CORPORATE STRATEGIES AND OPERATIONAL PLAN

Not Applicable.

7 FUNDING AND RESOURCING REQUIREMENTS

Not Applicable.

8 RISK MANAGEMENT

Not Applicable.

9 STATUTORY MATTERS

The March 2019 Monthly Financial Report is presented to Council in accordance with the Local Government Act 2009 and the Local Government Regulation 2012.

10 COUNCIL POLICIES

Not Applicable.

11 DELEGATIONS

Not Applicable.

12 COORDINATION & CONSULTATION

The March 2019 Monthly Financial Report has been developed in consultation with Directorate staff where applicable.

Name and/or Title of the Stakeholder Directorate Is the Stakeholder Satisfied Consulted With Content of Report and Recommendations (Yes/No) (comment as appropriate) Marilyn Hildebrandt, Executive Coordinator OCOO Yes Directorate Finances Julie Brooks, Executive Coordinator OCOO Yes Directorate Finances Alex Rummery, Executive Coordinator OCOO Yes Directorate Finances John Blair, Manager Corporate Finance OCOO Yes

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ITEM 1 (Continued) MARCH 2019 MONTHLY FINANCIAL REPORT FN334/375/20(P1)

13 STAKEHOLDER IMPACTS

Not Applicable.

14 TIMING

Not Applicable.

15 CONCLUSION

The presentation of the attached special purpose (unaudited) reports, 2018-19 Statement of Income and Expenditure and Statement of Financial Position, satisfies legislative financial reporting requirements for March 2019.

The high level indicators show that revenue and expenditure are generally within expectations at this point in the financial year.

16 RECOMMENDATION

It is recommended that Council resolves as follows:

That Council note the Special Purpose 2018-19 Statement of Income and Expenditure and Statement of Financial Position as presented for March 2019.

Author: Authorised by: Robert Liddell Joe McCabe Financial Planning & Business Analyst Chief Operating Officer 17 April 2019 #73222332

COMMITTEE RECOMMENDATION SBF19.0513.001 moved Cr Tate seconded Cr Gates

That Council note the Special Purpose 2018-19 Statement of Income and Expenditure and Statement of Financial Position as presented for March 2019.

CARRIED

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ITEM 1 (Continued) MARCH 2019 MONTHLY FINANCIAL REPORT FN334/375/20(P1) Attachment 1

SPECIAL PURPOSE FINANCIAL STATEMENT (UNAUDITED) COMBINING STATEMENT OF INCOME AND EXPENDITURE FOR CITY OF GOLD COAST FOR THE PERIOD ENDED 31 MARCH 2019 (in thousands of dollars)

GOLD COAST GOLD COAST GOLD COAST TOURIST PARKS WASTE MANAGEMENT WATER OTHER ACTIVITIES CITY OF GOLD COAST

BUDGET ACTUAL BUDGET ACTUAL BUDGET ACTUAL BUDGET ACTUAL BUDGET ACTUAL

REVENUE RATES & UTILITY CHARGES 0 0 (83,740) (63,287) (503,646) (379,829) (584,606) (565,902) (1,171,992) (1,009,018) 1 RATES DISCOUNTS & REMISSIONS 0 0 0 0 0 0 52,608 51,094 52,608 51,094 1 FEES AND CHARGES (18,135) (13,749) (11,177) (7,242) (3,658) (2,477) (72,079) (53,807) (105,049) (77,275) INTEREST REVENUE 0 0 (1,120) (977) (11,509) (9,555) (17,371) (16,043) (30,000) (26,575) 2 GAIN/LOSS ON SALE OF ASSETS 0 1 0 46 5,000 0 1,879 2,559 6,879 2,607 CONTRIBUTION & DONATIONS REVENUE 0 0 (378) (381) (86,500) (73,407) (144,163) (104,138) (231,040) (177,926) 3 GRANTS & SUBSIDIES REVENUE 0 0 0 (20) 0 0 (33,041) (20,613) (33,041) (20,633) OTHER REVENUE (64) 119 (44) (338) (40) (106) (27,453) (21,371) (27,601) (21,697) 4 TOTAL REVENUE (18,199) (13,629) (96,459) (72,199) (600,353) (465,374) (824,225) (728,221) (1,539,236) (1,279,422)

EXPENSES EMPLOYEE COSTS 676 503 9,367 4,666 50,589 34,937 313,091 229,016 373,723 269,121 MATERIALS AND SERVICES 16,389 9,565 83,462 49,342 482,011 334,575 491,053 144,373 1,072,915 537,855 DEPRECIATION & AMORTISATION 1,650 1,383 8,600 6,646 95,000 71,467 139,588 109,760 244,838 189,256 FINANCE COSTS 0 14 0 0 0 0 38,502 30,142 38,502 30,156 5 OTHER EXPENSES 3,025 2,228 1,044 998 733 873 98,693 95,104 103,494 99,204 6 CAPITALISED EXPENSES (4,775) (1,162) (10,575) (2,003) (94,980) (45,137) (407,805) (115,817) (518,135) (164,118) TOTAL EXPENSES 16,965 12,532 91,898 59,648 533,352 396,716 673,121 492,578 1,315,337 961,473

NET RESULT (1,233) (1,097) (4,561) (12,551) (67,001) (68,658) (151,104) (235,643) (223,899) (317,949)

General explanations of the above line items can be found in Appendix 1 1 This amount comprises Gold Coast Water rates, which are recognised on a progressive monthly basis, and other rates, which are recognised when billed. 2 Interest revenue comprises earnings based off higher than estimated cash balances. 3 Contributions and Donations Revenue comprises capital revenues from cash contributions and contributed assets. 4 Other Revenue is mostly comprised of Rental/Lease Revenue, Canteen Revenue and "Revenue Default". The latter is the account to which revenue is posted before being allocated to the 5 Finance Costs (includes credit card surcharges) and processed once quarterly statements are received from Queensland Treasury Corporation. 6 Other Expenses include Captive Insurance Premium payments ($8m) which are paid in full early in the financial year, Light Rail Stage 2 Contributions ($18m) and Contributions to Gold Coast Tourism ($16m).

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ITEM 1 (Continued) MARCH 2019 MONTHLY FINANCIAL REPORT FN334/375/20(P1)

SPECIAL PURPOSE FINANCIAL STATEMENT (UNAUDITED) STATEMENT OF FINANCIAL POSITION FOR CITY OF GOLD COAST AS AT 31 MARCH 2019 (in thousands of dollars)

BUDGET ACTUAL

ASSETS CURRENT ASSETS CASH ASSETS 720,420 1,151,541 1 CURRENT RECEIVABLES 204,808 219,131 2 INVENTORIES 1,785 1,955 PREPAYMENTS 702 946 CLEARING ACCOUNTS 0 (59) 3 927,715 1,373,514

NON CURRENT ASSETS OTHER FINANCIAL ASSETS 1,150 1,150 4 PROPERTY, PLANT AND EQUIPMENT 14,136,931 13,471,354 ASSETS UNDER CONSTRUCTION 0 320,891 5 14,138,081 13,793,395

TOTAL ASSETS 15,065,795 15,166,909

LIABILITIES CURRENT LIABILITIES CURRENT PAYABLES (95,172) (112,402) UNEARNED REVENUE (2,000) (35,451) 6 CURRENT EMPLOYEE BENEFITS (26,730) (22,490) CURRENT BORROWINGS (80,940) (77,395) CLEARING ACCOUNTS 0 537 3 (204,843) (247,201)

NON CURRENT LIABILITIES NON CURRENT EMPLOYEE BENEFITS (54,361) (60,709) NON CURRENT PROVISIONS (70,000) (70,000) 8 NON CURRENT BORROWINGS (552,328) (507,662) (676,689) (638,371)

TOTAL LIABILITIES (881,531) (885,572) NET COMMUNITY ASSETS 14,184,264 14,281,337

COMMUNITY EQUITY RETAINED CAPITAL 9,121,853 9,140,738 RESERVES 5,062,411 5,140,599 7

TOTAL COMMUNITY EQUITY 14,184,264 14,281,337

General explanations of line items can be found in Appendix 1.

1 Cash Assets include investments. The balance is usually highest after the close of the discount period for Rates (August and February) and Water (July, October, January and April). The cash balance comprises: (i) Infrastructure Charges Reserve ($479.2m), (ii) Investment Fund Reserve ($73.5m), (iii) Gold Coast Water & Waste reserves ($225.7m), (iv) Other reserves (Cultural Precinct, Strategic Priorities Reserve) ($76.7m) and (iv) Other cash items ($296.4m).

2 Current Receivables includes balances of outstanding invoices and accruals for water rates. It is usually highest after rate notices are issued (July, October, January and April). 3 Clearing Accounts comprise a number of accounts used to hold balances which are cleared periodically throughout the year, including credit cards, payroll related items and debtor refunds. 4 Other Financial Assets are Council's investments in Gold Coast City Council Insurance Co Ltd and SEQ Regional Recreational Facilities Pty Ltd. 5 The balance of Assets Under Construction is the accumulated expenditure on capital assets that have not yet been completed and added to Property, Plant and Equipment. From a budget perspective it is assumed that by year end all capital works have been completed and moved to Property, Plant and Equipment. 6 Unearned Revenue includes water rates which have been billed but are treated as unearned and recognised as revenue progressively throughout the year. They will be reduced by year end. 7 Reserves includes Asset Revaluation Surplus and Cash Reserves. 8 Non Current Provisions includes future rehabilitation and remedial works at the City's waste landfill sites. These works are expected to be undertaken from the year 2035 to the year 2080 with the majority of the costs being incurred for leachate management and landfill capping.

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ITEM 1 (Continued) MARCH 2019 MONTHLY FINANCIAL REPORT FN334/375/20(P1)

APPENDIX 1 – Explanation of Financial Statement Items This appendix is a general explanation of Council’s revenues, costs, assets and liabilities to aid in understanding the budget to actual comparison in the monthly financial report.

STATEMENT OF INCOME AND EXPENDITURE BY SIGNIFICANT ACTIVITIES REVENUE FROM ORDINARY ACTIVITIES Rates and Utility Rate revenue for Council will mainly be recorded in July and January Charges upon the issue of rate notices. Rate Revenue for Gold Coast Water is accounted for on an accrual basis throughout the year. Rates Discount Rate discount is recorded as an expense at the time of payment and and Remissions will mainly increase in July / August and January / February as rates are paid. However, remission is provided at the time of rate issue and will mainly increase in July and January. Fees and Charges The pattern of revenue for fees and charges reflects a mixture of billing cycles and seasonal variations. For example, licensing and other charges are mainly billed in the first quarter of the financial year, whereas development assessment receipts may follow building and economic trends. Gain/Loss on Sale A gain or loss on sale arises when Council assets are disposed of or sold at a value that varies from their book value. Interest Revenue Interest earned varies according to the cash balances available for investment throughout the year. Contributions and Includes capital revenues from cash contributions and contributed Donations assets. Contributed assets generally account for more than half of this Revenue budget which are a ‘book entry’ only and are brought to account through year-end processes. Grants and Subsidies are mainly received for specific capital projects after stages Subsidies of completion are reached. Revenue Other Revenue Other revenue comprises miscellaneous relatively small amounts of revenue that don’t fit into the major categories. It includes Reimbursements and Recoveries, and Rental and Lease Revenue. EXPENSES FROM ORDINARY ACTIVITIES Employee Costs The total expenditure on labour, including remuneration and benefits, as well as other employee-related costs such as superannuation, payroll tax and workers compensation. Materials and Where totals are shown for individual business units, the expenditure Services on materials and services includes internal transactions. Depreciation and Non-cash expense that estimates the use and ‘wear and tear’ of non- Amortisation current assets such as plant, equipment and infrastructure. Finance Costs Interest on loans, and bank charges.

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ITEM 1 (Continued) MARCH 2019 MONTHLY FINANCIAL REPORT FN334/375/20(P1)

Other Expenses Other expenses comprise miscellaneous expenses that don’t fit into the major categories. It includes contributions and donations, write offs, insurance premiums and external audit fees. Capitalised This line shows how much of the employee costs and materials and Expenses services are used in construction / purchase or major renewal of assets. The budget reflects the total expenditure identified in the Four Year Capital Works Program. Net Result for This line represents the budgeted increase in community equity to Period be retained at year end. This is used to fund new capital works and for loan redemption. Transfers to and from capital reserves are made as appropriate.

STATEMENT OF FINANCIAL POSITION Current assets The cash and cash equivalents that are currently held. The budget shows the budgeted closing balance at the end of the financial year. The actual cash balance will vary significantly throughout the year as rate receipts, loans and major payments are processed. Cash investment is managed by Council’s Treasury Section. Non Current Assets The budgeted value of property, plant and equipment and infrastructure assets, at year end, including land, roads, water and sewerage infrastructure after depreciation, renewals, new capital works, contributed assets and revaluations are accounted for. Current Liabilities The present obligations, arising in the past, that Council has to make payments for within the next financial year. The budget shows the expected balance of these liabilities at the end of the financial year. This includes accounts payable and provisions for employee entitlements to annual and long service leave. It also includes the expected commitment to pay loan redemption in the next financial year. Non-Current The expected balance, at year end, of provisions for employee Liabilities entitlements and debt that is not required to be paid within the next financial year. Community Equity Retained equity includes City Capital and any Surplus / Deficit. Reserves include cash-backed reserves representing infrastructure charges and asset revaluation reserves which record the valuation adjustments to Council’s existing non-current assets.

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ITEM 2 WATER AND WASTE WATER AND SEWERAGE SERVICES MARCH 2019 BUDGET REVIEW FN334/252/19(P8) Refer 9 page attachment

1 BASIS FOR CONFIDENTIALITY

Not Applicable.

2 EXECUTIVE SUMMARY

Not Applicable.

3 PURPOSE OF REPORT

The purpose of this report is to provide an overview of budget adjustments proposed for Water and Sewerage Services at the March 2019 Budget Review.

4 PREVIOUS RESOLUTIONS

Ex Minute No G18.0621.032

The City’s 2018-19 Budget was adopted by Council at the Budget Meeting held on 21 June 2018.

Ex Minute No B17.1207.002

1. That Council approve the decrease of $10.4 million to be transferred to the Water and Sewerage Infrastructure Reserve, with total anticipated transfer to Reserve now being $7.5 million for the 2017-18 financial year. 2. That Council note budget variations per Attachments 2 and 3 will be included in the September 2017 Budget Review.

Ex Minute No G19.0130.031

1. That Council approve the decrease of $0.5 million to be transferred to the Water and Sewerage Infrastructure Reserve, with total anticipated transfer to Reserve now being $8.0 million for the 2018-19 financial year. 2. That Council note budget variations per Attachments 2 and 3 will be included in the December 2018 Budget Review.

5 DISCUSSION

5.1 Introduction

The Local Government Act 2009 allows a Local Government to amend its budget for the financial year at any time before the year ends, by way of resolution. The City of Gold Coast Budget Review Policy requires any variations to the budget to be submitted to Council for approval through the quarterly budget review process.

The current City of Gold Coast Budget Review Policy states that all reports dealing with budget variations or budget transfers must be referred to Special Budget Committee.

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ITEM 2 (Continued) WATER AND SEWERAGE SERVICES MARCH 2019 BUDGET REVIEW FN334/252/19(P8)

5.2 Budget Adjustment Summary

Water and Sewerage Services’ proposed budget movements for the March 2019 Budget Review are set out in Attachments 1 and 2 and summarised in Table 1. These items are explained in detail in the following sections.

Mar 19 Dec 18 2018-19 Mar v Dec Summary Income Statement Review Review Initial Movement Year Ended 30th June 2019 ($M) ($M) ($M) ($M) % Operating Revenue 529.2 528.5 528.3 0.7 0.1 Flow-Dependant Expenses 203.8 204.4 204.4 0.6 0.3 Controllable Expenses 111.9 111.4 108.5 (0.5) (0.5) Operating Result $ 213.5 $ 212.7 $ 215.3 $ 0.8 0.4 Loss on Sale of Assets 5.0 5.0 5.0 0.0 0.0 Net Profit before Capital Items $ 208.5 $ 207.7 $ 210.3 $ 0.8 0.4 Capital Revenue 86.5 86.6 86.6 (0.1) (0.1) Depreciation / Amortisation 95.0 95.0 95.0 0.0 0.0 Earnings Before Interest and Taxation $ 200.0 $ 199.3 $ 202.0 $ 0.7 0.4 Interest Expense (QTC loan) 2.5 2.5 2.5 0.0 0.0 Interest Margin Expense 0.9 0.9 0.9 0.0 0.0 Shareholder Interest Expense 88.8 88.8 88.8 0.0 0.0 Income Tax Eqivalents 38.5 39.1 39.1 0.6 1.5 Net Profit After Taxation $ 69.3 $ 68.0 $ 70.7 $ 1.3 1.9

Capital Expenditure (*) 92.1 95.0 92.2 2.9 3.0 Total Capital Works Program Expenditure $ 92.1 $ 95.0 $ 92.2 $ 2.9 3.0 Table 1: Summary of Budget Adjustments (*) 2018-19 Initial Capital Program includes $2.8 million of infrastructure charges offset funded projects

5.3 Operating Revenue

Changes in operating revenue have been proposed at this budget review, as shown in Table 2.

Mar 19 Dec 18 2018-19 Mar v Dec Operating Revenue Review Review Initial Movement Year Ended 30th June 2019 ($M) ($M) ($M) ($M) % Access Charges 248.0 248.0 248.0 0.0 0.0 Usage Charges Revenue 264.6 264.5 264.5 0.1 0.1 Interest on Outstanding Rates 2.2 1.2 1.3 1.0 80.0 Interest on Investments 10.3 10.3 10.2 0.0 0.0 Fees and Charges 4.1 4.5 4.4 (0.4) (9.1) Total Operating Revenue $ 529.2 $ 528.5 $ 528.3 $ 0.7 0.1 Table 2 – Movement in Operating Revenue

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ITEM 2 (Continued) WATER AND SEWERAGE SERVICES MARCH 2019 BUDGET REVIEW FN334/252/19(P8)

5.3.1 Usage Charges Revenue – increase of $0.1 million

Net increase in usage charges revenue is $0.1 million or less than 0.1%. This increase is made up of:

. Budget for Concealed Leakage Remissions is proposed to reduce by $0.4 million to $2.1 million. The reduction is based on current remission levels and projected total remissions to be applied for the year.

. Revenue projections from non-drinking water sales are proposed to reduce by $0.3 million to reflect actual revenues being received from this source.

5.3.2 Interest on Outstanding Rates – increase $1.0 million

Debt recovery activities were expected to be enhanced this financial year, so the budget allocation was reduced as part of the initial budget preparation. The enhancement of recovery activities has been delayed following the implementation of the rates billing system. As a result, levels of outstanding rate balances have not reduced as expected and interest on those balances remains at similar levels to previous years.

5.3.3 Fees and Charges – decrease of $0.4 million

A net decrease in projected fees and charges revenue of $0.4 million has been recorded in this budget review as a result of:

. Budget projections for internal Laboratory Fees were inflated as a result of increased testing and monitoring that was being undertaken in the lead-up to Commonwealth Games. This revenue estimate has been reduced to more accurately reflected this year’s revenue expectations; . Calypso Bay has now been connected to the City's sewerage reticulation system with septic and sullage charges no longer being collected from this area; . Only minor defect rectification works are expected for the remainder of this financial year in relation to the Transport & Main Roads (TMR) works on the Southport- Burleigh Road. As a result, expected reimbursement estimate for this project has been reduced.

These decreases are partially offset by:

. Increase in leachate disposal charges being received from Landfills for leachate treatment at the Coombabah sewage treatment plant; and

. Increase in revenues associated with applications for connections to the City's sewer reticulation system. Applications for connection to the sewerage system associated with new developments have exceeded initial projections for the year.

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ITEM 2 (Continued) WATER AND SEWERAGE SERVICES MARCH 2019 BUDGET REVIEW FN334/252/19(P8)

5.4 Operating Expenses The below graph provides a breakdown of water and sewerage services operating expenses. It is noted that bulk water purchases remain unchanged at 59% of total operating expenses.

Graph 1 – Operating expenditure by category

5.4.1 Flow Dependant Expenses – decrease of $0.6 million

As shown in Table 3, a total decrease of $0.6 million in flow-dependant expenditure has been identified as part of the March 2019 Budget Review. Mar 19 Dec 18 2018-19 Mar v Dec Flow-Dependant Expenditure Review Review Initial Movement Year Ended 30th June 2019 ($M) ($M) ($M) ($M) % Bulk Water Purchase 185.7 185.7 185.7 0.0 0.0 Electricity 10.5 11.1 11.1 0.6 5.4 Biosolids Disposal 4.0 4.0 4.0 0.0 0.0 Chemicals 3.6 3.6 3.6 0.0 0.0 Total Flow-Dependant Expenditure $ 203.8 $ 204.4 $ 204.4 $ 0.6 0.3 Table 3 - Movement in Flow-Dependant Expenditure Electricity Charges across the Water and Sewerage business are below forecast, due to lower than expected price increases.

773rd Council Meeting 14 May 2019 18 Special Budget & Finance Committee Meeting 13 May 2019 Adopted Report

ITEM 2 (Continued) WATER AND SEWERAGE SERVICES MARCH 2019 BUDGET REVIEW FN334/252/19(P8)

5.4.2 Controllable Expenses – decrease of $0.5 million

As shown in Table 4, a total increase of $0.5 million in controllable expenses has been identified as part of the March 2019 Budget Review.

Mar 19 Dec 18 2018-19 Mar v Dec Controllable Expenses Review Review Initial Movement Year Ended 30th June 2019 ($M) ($M) ($M) ($M) % Employee Expenses 50.2 51.4 50.6 1.2 2.3 Materials and Services 26.9 26.1 24.7 (0.8) (3.2) Council Corporate SLAs 19.9 19.9 19.9 0.0 0.0 Internal Directorate SLA (3.3) (3.3) (3.3) 0.0 0.0 Fleet and Plant 8.6 7.9 8.0 (0.7) (8.2) Sewage Treatment Charge 3.9 3.5 3.5 (0.4) (10.0) Insurance Premiums 1.8 1.8 1.8 0.0 0.0 Other Expenditure 1.8 1.8 1.8 0.0 0.0 Consultants 2.0 2.2 1.5 0.2 7.9 Regulatory Expenses 0.1 0.1 0.1 0.0 0.0 Total Controllable Expenses $ 111.9 $ 111.4 $ 108.5 ($ 0.5) (0.5) Table 4 - Movement in Controllable Expenses

5.4.2.1 Employee expenses – decrease of $1.2 million

Employee expenses have reduced by $1.2 million or 2.3%, due to:

. Vacancies and overtime – decrease of $1.5 million Savings are due to reduced levels of overtime and vacancies across the business. These savings are offset by an increase in Materials & Services costs as external providers are engaged to deliver lower priority works.

. Rolling billing implementation – increase of $0.3 million From 1 July 2019, we are changing the way we bill for water and sewerage utility charges, by moving to a Rolling billing (Read to Bill) approach. Communication has already commenced with our customers and stakeholders to prepare them for the change in billing approach. It is anticipated there still may be some customer confusion during the transition period, so an implementation program has been developed which includes increased temporary staffing levels (35 staff for six months) within Customer Contact Centre to establish a dedicated "Continuous Billing Campaign Work Group / Queue". It is proposed to recruit these staff during May 2019 to enable sufficient time for training and skill consolidation, prior to the issue of the July 2019 water and sewerage bills. This allocation provides for the labour costs expected to be incurred in the current financial year.

773rd Council Meeting 14 May 2019 19 Special Budget & Finance Committee Meeting 13 May 2019 Adopted Report

ITEM 2 (Continued) WATER AND SEWERAGE SERVICES MARCH 2019 BUDGET REVIEW FN334/252/19(P8)

5.4.2.2 Materials and Services – increase of $0.8 million

Major contributors to this increase in Material and Services expenditure are:

• Water and sewer reticulation systems maintenance – increase of $1.5 million There has been limited increase in maintenance budgets over the last several year, however there have been significant changes in regulations, policy and operating environment. The main drivers contributing to this increase are:

- Increased leaks identified in larger trunk mains; - Increase in the asset base with major development of the northern corridor - dual reticulation doubles the quantity of assets in an area; - Major focus on safety improvements; - Change in classification from capital to operating expenditure for pipe replacements less than 8 metres in length; - Changes to specifications for road restoration requiring the keying in of the substrata; - Brownfield development construction activity impacting our assets and contributing to main breaks, along with increased utility works with NBN and roadworks.

. Rolling Billing Implementation – increase $0.3 million This increase is the material and services component of the rolling billing implementation outlined in 5.4.2.1 employee expenses. This increase provides for the costs expected to be incurred for targeted customer communications including bill inserts, flyers and other communication activities aimed at minimising customer impacts associated with this significant change, together with the system license costs for the additional staff.

The above increases are offset by deferral of $0.85 million in operational project scope relating to WPS and SPS decommissioning and Maintenance Hole Condition Assessments Projects to next financial year.

5.4.2.3 Fleet and Plant – increase of $0.7 million

Fleet and plant charges have increased by $0.7 million or 8.2% as a result of:

. Network maintenance – increase of $0.6 million Network maintenance external fleet and plant forecast has increased in line with the increased maintenance activity and the use of pumps and tankers to minimise customer disruption.

. Sewerage Pump Stations Maintenance – increase of $0.1 million These costs are forecast to increase by $0.1 million (less than 0.1%). This increase relates to costs for the hire of external fleet and plant that has not been separately budgeted.

773rd Council Meeting 14 May 2019 20 Special Budget & Finance Committee Meeting 13 May 2019 Adopted Report

ITEM 2 (Continued) WATER AND SEWERAGE SERVICES MARCH 2019 BUDGET REVIEW FN334/252/19(P8)

5.4.2.4 Sewage Treatment Charge – increase of $0.4 million

The terms of the City's service level agreement with Logan City Council provide for the City to be levied 'over limit' charges based around both the quantity and quality of wastewater discharged to the Beenleigh sewage treatment plant. A charge was levied by Logan City Council for the September - December 2018 quarter and, whilst work is ongoing within the City's Source Control section to actively identify, monitor and encourage customers to address these issues, it is considered prudent to provide for the potential that further 'over limit' charges may be incurred this financial year

5.5 Community Service Obligation - Catchment Management Unit

The Local Government Regulation 2012 defines a Community Service Obligation (CSO) as an obligation the local government imposes on a business unit to do something that is not in the commercial interests of the business unit to do. The Regulation determines the CSO amount is to be treated as revenue of the business unit for an amount equal to the cost of carrying out the obligation, less any revenue arising from carrying out the activity.

The Catchment Management Unit protects human health in recreational waters by monitoring the state of the city’s water environments and providing rapid reporting of the health status of primary contact recreation areas. It supports the maintenance of legislated environmental values in the city’s water environments through catchment and stormwater planning and implementation of appropriate environmental restoration actions.

These activities are funded by way of a Community Service Obligation (CSO). The total value of this CSO at adoption of the City’s initial budget was $4.63 million. An increase to the CSO of $0.18 million to $4.81 million as a result of 2017-18 deferrals was requested as part of the year-end wash up. The CSO remains unchanged at $4.81 following the March budget review.

Mar 19 Dec 18 Sep 18 2018-19 Mar v Dec Catchment Management Unit (Opex) Review Review Review Initial Movement Year Ended 30th June 2019 ($M) ($M) ($M) ($M) ($M) % CMU Operations 1.41 1.41 1.41 1.26 0.00 0.0 Catchment Activities 1.54 1.54 1.54 1.54 0.00 0.0 Healthy Waterways Contribution 0.32 0.32 0.32 0.32 0.00 0.0 WaterSafe Monitoring and Investigations 0.20 0.20 0.20 0.25 0.00 0.0 Laboratory Testing Services 0.59 0.59 0.59 0.54 0.00 0.0 Community Action Support 0.20 0.20 0.20 0.16 0.00 0.0 Water Cycle Implementation 0.11 0.11 0.11 0.11 0.00 0.0 SLA for Corporate Services 0.46 0.46 0.46 0.46 0.00 0.0 Total 4.81 4.81 4.81 4.63 0.00 0.0 Table 7 – Summary of Catchment Management Unit – Operational Expenses

773rd Council Meeting 14 May 2019 21 Special Budget & Finance Committee Meeting 13 May 2019 Adopted Report

ITEM 2 (Continued) WATER AND SEWERAGE SERVICES MARCH 2019 BUDGET REVIEW FN334/252/19(P8)

5.6 Capital Investment Program Expenditure

5.6.1 Overview of Capital Investment Program

The 2018-19 initial approved capital investment program included works totalling $94.98 million with no net movement in either the September 2018 or December 2018 budget reviews. A decrease of $2.89 million or 3% is proposed following the March 2019 budget review. Table 8 provides a summary of capital expenditure across the program.

Water and Waste Water and Sewerage Services Capital Program

Mar 19 Dec 18 Sept 18 2018-19 Mar v Dec Product Review Review Review Initial Movement

($M) ($M) ($M) ($M) Mvt ($) Mvt (%) Sewerage 72.55 76.66 76.91 75.09 (4.11) (5%) Water 18.95 17.73 17.48 19.81 1.23 6% Non-Core Water 0.52 0.52 0.52 0.00 0.00 - Corporate 0.08 0.08 0.08 0.08 0.00 - Total Capital Expenses 92.09 94.98 94.98 94.98 (2.89) (3%) Table 8 – Capital Program

Table 9 provides a high level breakdown of the movement in the program.

Movement % of total Budget Decreases ($M) Movement Works deferred to future years (11.44) 76% Project no longer required (1.89) 13% Revised project estimate - budget reduction (0.78) 5% Infrastructure Agreement construction costs to be offset against developer infrastructure charges (0.57) 4% Scope reduction (0.12) 1% Contract sum lower than project estimate (0.24) 2% Total Decreases (15.05) 100% Movement % of total Budget Increases ($M) Movement Works brought forward from future years 7.19 60% Scope addition 2.95 24% Revised project estimate - budget increase 0.85 7% Works carried over from previous financial year 0.62 5% New project 0.27 2% Contract sum higher than project estimate 0.19 2%

Total Increases 12.07 100%

Net Movement (2.98)

Table 9 – Movement in capital program

773rd Council Meeting 14 May 2019 22 Special Budget & Finance Committee Meeting 13 May 2019 Adopted Report

ITEM 2 (Continued) WATER AND SEWERAGE SERVICES MARCH 2019 BUDGET REVIEW FN334/252/19(P8)

5.6.2 Capital Investment Program Movements

Table below shows the movement between the December 2018 and March 2019 budget reviews for the capital projects with an initial budget greater than $1 million. An increase of $0.64 million or 1% is proposed following the March 2019 budget review. These projects represent 75% of the total revised capital investment program.

2018-19 Sept Dec Mar Mar v Dec Top Capital Projects Initial Review Review Review Movement (as presented in initial Budget) ($M) ($M) ($M) ($M) Mvt ($M) Mvt (%)

Long Term Recycled Water Release STAGE 1 31.90 31.90 31.90 37.40 5.50 17% Pimpama to Coombabah STP Release Main 6.20 3.20 3.20 1.00 (2.20) (69%) Sewer Gravity Main Renewals 2018-19 4.00 5.00 5.00 5.00 - - Potable Water Filling Stations 3.68 3.68 3.68 3.68 - - Water Meter Replacements 2018-19 3.60 3.60 3.60 3.90 0.30 8% Sewer Maintenance Hole Rehab 2018-19 2.83 2.62 2.62 0.65 (1.97) (75%) Coombabah STP Stage 6 Upgrade 2.50 2.50 2.50 1.05 (1.46) (58%) Coombabah STP Liquid Waste Receival Facility 2.40 0.63 0.63 0.23 (0.40) (64%) SPS Switchboard Renewals 2017-19 2.05 2.85 2.85 2.85 - - Water Main Replacements 2018-19 1.95 1.95 1.95 3.07 1.12 57% New Water Mains in Coomera 1.91 0.01 0.01 0.00 (0.00) (40%) Elanora STP Digester A Sludge Heater Ref 1.85 1.85 1.85 3.00 1.15 62% Coombabah STP Digesters – Supply and Install Cogeneration Unit 1.81 0.70 0.70 0.60 (0.10) (14%) New Water Mains in Stapylton & Alberton 1.80 0.30 0.30 0.02 (0.28) (93%) Sewer Pressure Main Renewals 2018-19 1.75 0.75 0.75 0.75 - - Fall from heights prevention SPS 1.60 1.60 1.60 1.48 (0.12) (8%) Hydrant Replacements 2018-19 1.50 1.50 1.50 1.50 - - Recycled Water Network Expansion 1.50 1.50 1.50 0.71 (0.79) (53%) STP Process Tank Refurbishment 2018-21 1.43 0.70 0.70 0.25 (0.45) (64%) Sewer Minor Civil Works 2018-19 1.00 1.00 1.00 1.00 - - STP Mech Elec Renewals 2018-19 1.00 1.00 1.00 1.34 0.34 34% 78.26 68.83 68.83 69.47 0.64 1% Table 10 - Movement in projects with initial budget greater than $1 million (September to December)

The most significant movements in the capital program are:

. $2.20 million decrease in Pimpama to Coombabah STP Release Main: This multi-year project has experienced delays due to an ongoing legal dispute regarding an easement. Works have been deferred to future years.

. $1.97 million decrease in Sewer Maintenance Hole Rehabilitation 2018-19: These works have been combined with the 2019-20 scope for delivery, and have therefore been deferred to 2019-20.

Refer to Attachment 3 for a detailed listing of all proposed budget movements within the water and sewerage services capital program following the March 2019 budget review.

773rd Council Meeting 14 May 2019 23 Special Budget & Finance Committee Meeting 13 May 2019 Adopted Report

ITEM 2 (Continued) WATER AND SEWERAGE SERVICES MARCH 2019 BUDGET REVIEW FN334/252/19(P8)

Table 11 provides a breakdown of the revised program by project phase. At the time of the March 2019 budget review, over half of the total value of the program is in Delivery phase, 35% of the program is in Procurement / Specification phase and 6% remains in the Planning phase. 92% of the total program is in either Procurement / Specification or Delivery phase, indicating a commitment to deliver the 2018-19 program.

Water and Waste Water and Sewerage Services Capital Program

Mar 19 Dec 18 Sept 18 2018-19 % of No of Delivery Phase Review Review Review Initial Program Projects ($M) ($M) ($M) ($M) Value Planning 5.47 10.70 11.70 16.97 15 6% Initiation 0.55 0.75 0.51 0.00 4 1% Procurement / Specification 32.24 35.93 37.26 35.09 42 35% Delivery 52.81 45.03 43.83 42.60 28 57% Closure 1.02 2.58 1.68 0.32 21 1% Total 92.09 94.99 94.98 94.98 110 100%

Table 11 – Breakdown of capital program by delivery phase

5.7 Capital Revenue

A decrease of $0.1 million in capital revenue has been forecast as part of the March 2019 budget review, as shown in Table 12.

Mar 19 Dec 18 2018-19 Mar v Dec Capital Revenue Review Review Initial Movement Year Ended 30th June 2019 ($M) ($M) ($M) ($M) % Developer Contributions 46.5 46.5 46.5 0.0 0.0 Contributions and Donations Received 0.0 0.1 0.1 (0.1) (98.0) Contributed Assets 40.0 40.0 40.0 0.0 0.0 Total Capital Revenue $ 86.5 $ 86.6 $ 86.6 ($ 0.1) (0.1) Table 12 - Movement in Capital Revenue

Contributions and donations to be received from customers for the installation of new meters has been reduced by $0.1 million or 98%, as the City no longer undertakes this type of work on behalf of developers.

5.8 Infrastructure Charges Reserves

Infrastructure Charges may only be utilised for the purpose in which they were collected. Following the March budget review, Infrastructure Charges Reserves funding for growth- related projects has decreased by $4.1 million, with a total of $23.0 million expected to be drawn from these reserves in the current financial year.

This decrease has resulted from reduced capital expenditure on a number of growth related projects and the reduction in the growth component of the Bloom subdivision trunk works from 100% to nil.

773rd Council Meeting 14 May 2019 24 Special Budget & Finance Committee Meeting 13 May 2019 Adopted Report

ITEM 2 (Continued) WATER AND SEWERAGE SERVICES MARCH 2019 BUDGET REVIEW FN334/252/19(P8)

Infrastructure Charges that cannot be utilised in the current year are retained within the City’s Infrastructure Charges Reserves to be utilised for funding of growth-related infrastructure. Based on current projections, Infrastructure Charges Reserves relating to Water and Sewerage networks are expected to total approximately $228 million at 30 June 2019.

Water and Sewerage Services is projecting significant capital expenditure on growth-related infrastructure over the next ten years. The capital program is expected to fully exhaust available infrastructure charges reserves funding within the first five years of the projected capital program.

5.9 Income Tax Equivalents – decrease $0.6 million The initial adopted budget projected Income Tax Equivalents payments totalling $39.1 million for the current year. This estimate has been reduced by $0.6 million to $38.5 million at this review.

In order to minimise impacts to the City’s overall budget position throughout the year, Council determined that income tax equivalents movements would be held within the water and sewerage services’ accounts until the final budget review of each financial year. Income tax equivalents as a result of movements identified in the September and December budget reviews was a decrease of $0.8 million. Income tax equivalents recognised as a result movements identified in the March budget review is an increase of $0.2 million, resulting in a net $0.6 million decrease recognised as part of the March budget review.

5.10 Distribution of Earnings before Interest and Tax (EBIT) Following the adjustments outlined in this report, 2018-19 Earnings before Interest and Tax (EBIT), on a cash basis, is estimated at $236.6 million (operating revenue of $529.2 million, cash capital revenues of $23.0 million less cash operating expenditure of $315.6 million).

Mar 19 Dec 18 2018-19 Mar v Dec Distribution of Earnings Review Review Initial Movement Year Ended 30th June 2019 ($M) ($M) ($M) ($M) % Interest Expense (External) 2.5 2.5 2.5 0.0 0.0 Principal Repayment (External) 4.7 4.7 4.7 0.0 0.0 Debt Service Payment $ 7.2 $ 7.2 $ 7.2 $ 0.0 0.0 Capital Expenditure 92.1 95.0 92.2 2.9 3.0 Capital Expenditure $ 92.1 $ 95.0 $ 92.2 $ 2.9 3.0 Interest Returned - Community Investment in GCW 88.8 88.8 88.8 0.0 0.0 Tax Equivalents 38.5 39.1 39.1 0.6 1.5 Participation Return 0.0 0.0 0.0 0.0 0.0 Contribution - Whole of City projects 1.0 1.0 1.0 0.0 0.0 Interest Expense Margin 0.9 0.9 0.9 0.0 0.0 Payment to Council (Excluding SLA & Land Tax) $ 129.2 $ 129.8 $ 129.8 $ 0.6 0.0

Retained Earnings for future GCW Capital Works 8.1 8.0 10.4 0.1 1.1 Investment Total Distribution $ 236.6 $ 240.0 $ 239.7 $ 3.4 (1.4) Table 13 – Distribution of Earnings * SLA and Land Tax payments are further payments to Council which are recorded within Water and Sewerage’s Operating Expenses and are therefore not reported as part of the Distribution of Earnings.

773rd Council Meeting 14 May 2019 25 Special Budget & Finance Committee Meeting 13 May 2019 Adopted Report

ITEM 2 (Continued) WATER AND SEWERAGE SERVICES MARCH 2019 BUDGET REVIEW FN334/252/19(P8)

The net result of this budget review is an increase of $0.1 million in transfer to Water and Sewerage Infrastructure Reserve. The key drivers for this movement is a reduction of $4.1 million in infrastructure charges funding of capital projects offset by a decrease in capital expenditure of $2.9 million and an increase in interest on outstanding rates of $1.0 million.

5.11 Water and Sewerage Infrastructure Reserve

Cash surpluses from operations are transferred to the Water and Sewerage Infrastructure Reserve. These cash reserves are set aside for future investment in water and sewerage infrastructure.

In excess of $1.3 billion is expected to be required for water and sewerage infrastructure over the next ten years.

With the movements processed at this budget review, the reserve balance, as at 30 June 2019 is projected to be in the order of $190 million.

5.12 Returns to Community

In accordance with the City’s GCW Capital Structure and Community Returns Policy, water and sewerage services operates as a commercial business unit and provides an appropriate return to the community, based on the community’s investment in the water and sewerage business.

Returns to the community (excluding SLA, Insurance Premiums and Fleet and Plant charges) for the year ended 30 June 2019 are projected to total $131.0 million, a decrease of $0.6 million. A breakdown of those returns is set out in Table 14:

Mar 19 Dec 18 2018-19 Mar v Dec Returns to Community Review Review Initial Movement Year Ended 30th June 2019 ($M) ($M) ($M) ($M) % Interest Margin Expense 0.9 0.9 0.9 0.0 0.0 Shareholder Interest Expense 88.8 88.8 88.8 0.0 0.0 Income Tax Equivalents 38.5 39.1 39.1 0.6 1.5 Land Tax 1.8 1.8 1.8 0.0 0.0 Contribution - Whole of City projects 1.0 1.0 1.0 0.0 0.0 Participation Return 0.0 0.0 0.0 0.0 0.0 Returns to Community (Excl SLA, Insurance Premiums and Fleet and Plant) $ 131.0 $ 131.6 $ 131.6 $ 0.6 0.0 Council Corporate SLAs 19.9 19.9 19.9 0.0 0.0 Insurance Premiums 1.8 1.8 1.8 0.0 0.0 Council Fleet & Plant Charges 4.3 4.1 4.1 (0.2) (4.8) Total Returns to Community $ 157.0 $ 157.4 $ 157.5 $ 0.4 0.0 Table 14 –Returns to Community

This minor reduction in Community Returns (less than 1.5%) is predominantly due to an increase in Controllable Expenses since the adoption of the Initial 2018-19 Budget. From Initial Budget, Controllable Expenses have increased by $3.3 million (3.1%).

773rd Council Meeting 14 May 2019 26 Special Budget & Finance Committee Meeting 13 May 2019 Adopted Report

ITEM 2 (Continued) WATER AND SEWERAGE SERVICES MARCH 2019 BUDGET REVIEW FN334/252/19(P8)

6 ALIGNMENT TO THE CORPORATE PLAN, CORPORATE STRATEGIES AND OPERATIONAL PLAN

Not Applicable.

7 FUNDING AND RESOURCING REQUIREMENTS

Not Applicable.

8 RISK MANAGEMENT

The following risk assessment applied to this report:

Risk Number Description

Risk No. Non-compliance with State and Commonwealth legislation leading to CO000431 potential prosecution of Council, executive officer liability and negative city image.

Risk No. Qualified audit leading to Council’s reputation being damaged. CO000433

Risk No. Failure to achieve a sustainable long term financial position leading CO000435 to negative impacts on Council’s ability to deliver on its key focus area commitments.

9 STATUTORY MATTERS

. Queensland Competition Authority Act 1997 . Local Government Regulation 2012 . Water Act 2000 . Local Government Act 2009 . South East Queensland Water (Distribution and Retail Restructuring) Act 2009 . South East Queensland Water (Distribution and Retail Restructuring) and Other Legislation Amendment Bill 2011

10 COUNCIL POLICIES

. Gold Coast Water Capital Structure and Community Returns Policy . Revenue Policy . City of Gold Coast Budget Review Policy . Water and Sewage Leakage Relief Policy

11 DELEGATIONS

Not Applicable.

773rd Council Meeting 14 May 2019 27 Special Budget & Finance Committee Meeting 13 May 2019 Adopted Report

ITEM 2 (Continued) WATER AND SEWERAGE SERVICES MARCH 2019 BUDGET REVIEW FN334/252/19(P8)

12 COORDINATION AND CONSULTATION Name and/or Title of the Directorate or Is the Stakeholder Satisfied Stakeholder Consulted Organisation With Content of Report and Recommendations (Yes/No) (comment as appropriate) Marilyn Hildebrandt Office of the CEO (Executive Coordinator Yes

Directorate Finances)

13 STAKEHOLDER IMPACTS

Not Applicable.

14 TIMING

Not Applicable.

15 CONCLUSION

The City of Gold Coast Budget Review Policy requires that, except for items identified for corporate funding, each Directorate is to submit a balanced quarterly budget review. Budget variations contained in this report comply with this requirement.

Following completion of a detailed quarterly review of capital and operating budgets (revenue and expenditure), movements have been recorded across several areas of the business. Budget movements have not required corporate funding.

Table 15 provides a summary of adjustments recorded at this review:

Mar 19 Dec 18 2018-19 Mar v Dec Summary Income Statement Review Review Initial Movement Year Ended 30th June 2019 ($M) ($M) ($M) ($M) % Operating Revenue 529.2 528.5 528.3 0.7 0.1 Flow-Dependant Expenses 203.8 204.4 204.4 0.6 0.3 Controllable Expenses 111.9 111.4 108.5 (0.5) (0.5) Operating Result $ 213.5 $ 212.7 $ 215.3 $ 0.8 0.4 Loss on Sale of Assets 5.0 5.0 5.0 0.0 0.0 Net Profit before Capital Items $ 208.5 $ 207.7 $ 210.3 $ 0.8 0.4 Capital Revenue 86.5 86.6 86.6 (0.1) (0.1) Depreciation / Amortisation 95.0 95.0 95.0 0.0 0.0 Earnings Before Interest and Taxation $ 200.0 $ 199.3 $ 202.0 $ 0.7 0.4 Interest Expense (QTC loan) 2.5 2.5 2.5 0.0 0.0 Interest Margin Expense 0.9 0.9 0.9 0.0 0.0 Shareholder Interest Expense 88.8 88.8 88.8 0.0 0.0 Income Tax Eqivalents 38.5 39.1 39.1 0.6 1.5 Net Profit After Taxation $ 69.3 $ 68.0 $ 70.7 $ 1.3 1.9

Capital Expenditure (*) 92.1 95.0 92.2 2.9 3.0 Total Capital Works Program Expenditure $ 92.1 $ 95.0 $ 92.2 $ 2.9 3.0 Table 15: Summary of Budget Adjustments – Water & Sewerage Services – September 2018 Budget Review (*) 2018-19 Initial Capital Program includes $2.8 million of infrastructure charges offset funded projects

773rd Council Meeting 14 May 2019 28 Special Budget & Finance Committee Meeting 13 May 2019 Adopted Report

ITEM 2 (Continued) WATER AND SEWERAGE SERVICES MARCH 2019 BUDGET REVIEW FN334/252/19(P8)

The net result of this review is that forecast returns (excluding SLA, Insurance Premiums and Fleet and Plant) to the City have decreased by $0.6 million and are projected to total $131.0 million.

Mar 19 Dec 18 2018-19 Mar v Dec Returns to Community Review Review Initial Movement Year Ended 30th June 2019 ($M) ($M) ($M) ($M) % Interest Margin Expense 0.9 0.9 0.9 0.0 0.0 Shareholder Interest Expense 88.8 88.8 88.8 0.0 0.0 Income Tax Equivalents 38.5 39.1 39.1 0.6 1.5 Land Tax 1.8 1.8 1.8 0.0 0.0 Contribution - Whole of City projects 1.0 1.0 1.0 0.0 0.0 Participation Return 0.0 0.0 0.0 0.0 0.0 Returns to Community (Excl SLA, Insurance Premiums and Fleet and Plant) $ 131.0 $ 131.6 $ 131.6 $ 0.6 0.0

Table 16 –Returns to Community

16 RECOMMENDATION

It is recommended that Council resolves as follows:

1 That Council approve the increase of $0.1 million to be transferred to the Water and Sewerage Infrastructure Reserve, with total anticipated transfer to Reserve now being $8.1 million for the 2018-19 financial year. 2 That Council note budget variations per Attachments 2 and 3 will be included in the March 2019 Budget Review.

Author: Authorised by: Karen O’Brien Paul Heaton Manager Business Performance Director Water and Waste 29 March 2019 TRACKS REF: #73023150

COMMITTEE RECOMMENDATION SBF19.0513.002 moved Cr Tate seconded Cr Boulton

1 That Council approve the increase of $0.1 million to be transferred to the Water and Sewerage Infrastructure Reserve, with total anticipated transfer to Reserve now being $8.1 million for the 2018-19 financial year. 2 That Council note budget variations per Attachments 2 and 3 will be included in the March 2019 Budget Review.

CARRIED

773rd Council Meeting 14 May 2019 29 Special Budget & Finance Committee Meeting 13 May 2019 Adopted Report

ITEM 2 (Continued) WATER AND SEWERAGE SERVICES MARCH 2019 BUDGET REVIEW FN334/252/19(P8) Attachment 1.1 DETAILED INCOME STATEMENT (ACCRUAL) MARCH 2019 BUDGET REVIEW Water and Sewerage Services Mar 19 Dec 18 2018-19 Mar v Dec Financial Management Statement Review Review Initial Movement Year Ended 30th June 2019 ($'000) ($'000) ($'000) ($'000) % Operating Revenue Access Charges 247,975 247,975 247,975 0 0.0 Usage Charges Revenue 266,711 266,952 266,952 (241) (0.1) Less: Concealed Leakage (2,100) (2,500) (2,500) 400 (16.0) Interest on Outstanding Rates 2,250 1,250 1,250 1,000 80.0 Interest on Investments 10,259 10,259 10,164 0 0.0 Fees and Charges 4,130 4,545 4,430 (415) (9.1) Total Operating Revenue 529,225 528,481 528,271 744 0.1

Flow-Dependant Expenditure Bulk Water Purchase 185,718 185,718 185,718 0 0.0 Electricity 10,490 11,090 11,090 600 5.4 Biosolids Disposal 3,978 3,978 3,978 0 0.0 Chemicals 3,612 3,612 3,612 0 0.0 Total Flow-Dependant Expenditure 203,797 204,397 204,397 600 0.3

Operating Revenue net of Flow-Dependant 325,428 324,084 323,874 1,344 0.4 Expenditure Controllable Expenses Employee Expenses 50,170 51,325 50,569 1,156 2.3 Materials and Services 26,912 26,072 24,716 (840) (3.2) Council Corporate SLAs 19,924 19,924 19,924 0 0.0 Internal Directorate SLA (3,332) (3,332) (3,332) 0 0.0 Fleet and Plant 8,625 7,975 7,975 (650) (8.2) Sewage Treatment Charge 3,850 3,500 3,500 (350) (10.0) Insurance Premiums 1,821 1,821 1,821 0 0.0 Other Expenditure 1,800 1,800 1,800 0 0.0 Consultants 2,019 2,192 1,468 173 7.9 Regulatory Expenses 93 93 93 0 0.0 Total Controllable Expenses 111,880 111,369 108,533 (512) (0.5) Total Operating Expenses 315,678 315,766 312,930 89 0.0 Loss on Sale of Assets 5,000 5,000 5,000 0 0.0 Net Profit before Capital Revenue 208,548 207,715 210,341 833 0.4 Capital Revenue Developer Contributions 46,500 46,500 46,500 0 0.0 Contributions and Donations Received 2 100 125(98) (98.0) Contributed Assets 40,000 40,000 40,000 0 0. Total Capital Revenue 86,502 86,600 86,625 (98) (0.1) Depreciation 95,000 95,000 95,000 0 0.0

EBIT 200,050 199,315 201,966 735 0.4 Interest Expense (QTC loan) 2,509 2,509 2,509 0 0.0 Interest Margin Expense 881 881 881 0 0.0 Shareholder Interest Expense 88,824 88,824 88,824 0 0.0 Income Tax Equivalents 38,524 39,099 39,099 575 1.5 NPAT 69,310 68,001 70,652 1,309 1.9 Contribution - Whole of City projects 1,000 1,000 1,000 0 0.0 Participation Return 0 0 0 0 0.0

Retained Earnings 68,310 67,001 69,652 1,309 2.0

773rd Council Meeting 14 May 2019 30 Special Budget & Finance Committee Meeting 13 May 2019 Adopted Report

ITEM 2 (Continued) WATER AND SEWERAGE SERVICES MARCH 2019 BUDGET REVIEW FN334/252/19(P8) Attachment 1.2 DETAILED INCOME STATEMENT (CASH) MARCH 2019 BUDGET REVIEW Water and Sewerage Services Mar 19 Dec 18 2018-19 Mar v Dec Financial Management Statement {Cash} Review Review Initial Movement Year Ended 30th June 2019 ($'000's) ($'000's) ($'000's) Mvt % Mvt Operating Revenue Access Charges 247,975 247,975 247,975 0 0.0 Usage Charges Revenue 266,711 266,952 266,952 (241) (0.1) Less: Concealed Leakage (2,100) (2,500) (2,500) 400 (16.0) Interest on Outstanding Rates 2,250 1,250 1,250 1,000 80.0 Interest on Investments 10,259 10,259 10,164 0 0.0 Fees and Charges 4,130 4,545 4,430 (415) (9.1) Total Operating Revenue 529,225 528,481 528,271 744 0.1

Flow-Dependant Expenditure Bulk Water Purchase 185,718 185,718 185,718 0 0.0 Electricity 10,490 11,090 11,090 600 5.4 Biosolids Disposal 3,978 3,978 3,978 0 0.0 Chemicals 3,612 3,612 3,612 0 0.0 Total Flow-Dependant Expenditure 203,797 204,397 204,397 600 0.3 Operating Revenue net of Flow-Dependant Expenditure 325,428 324,084 323,874 1,344 0.4

Controllable Expenses Employee Expenses 50,170 51,325 50,569 1,156 2.3 Materials and Services 26,912 26,072 24,716 (840) (3.2) Council Corporate SLAs 19,924 19,924 19,924 0 0.0 Internal Directorate SLA (3,332) (3,332) (3,332) 0 0.0 Fleet and Plant 8,625 7,975 7,975 (650) (8.2) Sewage Treatment Charge 3,850 3,500 3,500 (350) (10.0) Insurance Premiums 1,821 1,821 1,821 0 0.0 Other Expenditure 1,800 1,800 1,800 0 0.0 Consultants 2,019 2,192 1,468 173 7.9 Regulatory Expenses 93 93 93 0 0.0 Total Controllable Expenses 111,880 111,369 108,533 (512) (0.5) Total Operating Expenses 315,678 315,766 312,930 89 0.0 Loss on Sale of Assets 0 0 0 0 0.0 Net Profit before Capital Revenue 213,548 212,715 215,341 833 0.4 Capital Revenue Developer Contributions Funding 23,030 27,140 24,200 (4,110) (15.1) Contribution / Donations Received (Capital) 2 100 125 (98) (98.0) Total Capital Revenue 23,032 27,240 24,325 (4,208) (15.4) Depreciation / Amortisation 0 0 0 0 0.0 EBIT 236,580 239,955 239,666 (3,376) (1.4) Interest Expense (QTC loan) 2,509 2,509 2,509 0 0.0 Interest Margin Expense 881 881 881 0 0.0 Shareholder Interest Expense 88,824 88,824 88,824 0 0.0 Income Tax Equivalents 38,524 39,099 39,099 575 1.5 NPAT 105,840 108,641 108,352 (2,801) (2.6) Special Contributions to City Projects 1,000 1,000 1,000 0 0.0 Participation Return 0 0 0 0 0.0 Debt Redemption 4,687 4,687 4,687 0 0.0 Capital Expenditure 92,092 94,980 92,248 2,888 3.0 Transfer to / (from) reserves 8,062 7,974 10,417 87 1.1

773rd Council Meeting 14 May 2019 31 Special Budget & Finance Committee Meeting 13 May 2019 Adopted Report

ITEM 2 (Continued) WATER AND SEWERAGE SERVICES MARCH 2019 BUDGET REVIEW FN334/252/19(P8) Attachment 2 GOLD COAST WATER – MARCH 2019 BUDGET REVIEW – BUDGET CENTRE MOVEMENTS 2018-19 2018-19 2018-19 2018-19 2018-19 December March March March March Budget Centre Review Review Review Review Review Total Recurrent Non- Total Total Budget Movement Recurrent Movement Budget CS4810O003 - CMU - Operations 4,350,997 0 0 0 4,350,997 GW2000O003 - SS-Unallocated Water Services-Operating 343,060 0 0 0 343,060 GW2020C001 - AS-Water-Capital Works 13,863,000 0 1,178,000 1,178,000 15,041,000 GW2020C002 - AS-Sewer-Capital Works 50,360,000 0 (483,500) (483,500) 49,876,500 GW2020C005 - AS-Non Core Water-Capital Works 4,037,000 0 425,500 425,500 4,462,500 GW2020C007 - AS-Non Regulated Water Services-Capital 80,000 0 0 0 80,000 GW2020O001 - AS-Water-Operating 696,068 0 (255,000) (255,000) 441,068 GW2020O002 - AS-Sewer-Operating 921,466 0 (55,000) (55,000) 866,466 GW2030O001 - NR-Water-Operating 1,847,335 0 (102,500) (102,500) 1,744,835 GW2030O002 - NR-Sewer-Operating 3,531,635 0 (641,000) (641,000) 2,890,635 GW2040O001 - NC-Water-Operating 177,500 0 (55,500) (55,500) 122,000 GW2050O001 - Mmac STP-Sewer-Operating 6,059,149 0 100,000 100,000 6,159,149 GW2060O001 - Elanora STP-Sewer-Operating 3,492,574 0 0 0 3,492,574 GW2070O001 - Cmbbah STP-Sewer-Operating 9,627,621 0 (100,000) (100,000) 9,527,621 GW2080O001 - Pimpama STP-Sewer-Operating 2,806,993 0 (100,000) (100,000) 2,706,993 GW2100O001 - Wkshp-Unallocated Water Services - Ops 550,934 0 (60,000) (60,000) 490,934 GW2100O002 - Wkshp - Sewer - Operating 1,635,930 0 (240,000) (240,000) 1,395,930 GW2110D001 - BP-Debt Servicing 8,077,552 0 0 0 8,077,552 GW2110I001 - BP-SLA Org Services to GCW 17,755,819 0 0 0 17,755,819 GW2110I002 - BP-SLA OCOO to GCW 1,745,417 0 0 0 1,745,417 GW2110I003 - BP-Competitive Neutrality Tax 40,899,274 0 (574,883) (574,883) 40,324,391 GW2110I004 - BP-Dividend/ROE to Council 89,824,000 0 0 0 89,824,000 GW2110I005 - BP-SLA EP&E to GCW 423,000 0 0 0 423,000 GW2110O001 - BP-Water-Operating (113,166,488) 0 (3,036,462) (3,036,462) (116,202,950) GW2110O002 - BP-Sewerage-Operating (212,331,770) 0 2,073,345 2,073,345 (210,258,425) GW2110O003 - BP-Unallocated Water Services-Operating 10,549,130 0 326,000 326,000 10,875,130 GW2110O004 - BP-Recycled Water-Operating (971,700) 0 241,000 241,000 (730,700) GW2140O002 - DS-Unallocated Sewer Services-Operating 173,000 0 79,000 79,000 252,000 GW2140O003 - DS–Unallocated Operating 3,415,120 0 2,000 2,000 3,417,120 GW2150O001 - WPS-Water-Operating 762,207 0 (50,000) (50,000) 712,207 GW2160O001 - SPS-Sewer-Operating 5,771,375 0 50,000 50,000 5,821,375 GW2170O001 - Rsvr-Water-Operating 384,014 0 100,000 100,000 484,014 GW2190O001 - NO-Water-Operating 3,525,800 0 (250,000) (250,000) 3,275,800 GW2190O002 - NO-Sewer-Operating 7,239,593 0 (238,000) (238,000) 7,001,593 GW2200O001 - NM-Water-Operating 12,294,437 0 2,300,000 2,300,000 14,594,437 GW2200O002 - NM-Sewer-Operating 8,491,927 0 (500,000) (500,000) 7,991,927 GW2200O003 - NM-Recycled Water-Operating 247,409 0 0 0 247,409 GW2200O004 - NM-Unallocated Water Services-Operating 143,391 0 0 0 143,391 GW2200O005 - NM-Unallocated Sewer Services-Operating 276,329 0 0 0 276,329 GW2210O001 - PMQ-Water-Operating 1,057,929 0 (100,000) (100,000) 957,929 GW2210O002 - PMQ-Sewer-Operating 536,065 0 (62,000) (62,000) 474,065 GW2220O001 - CM - Customer Management (Water) 1,575,425 0 610,000 610,000 2,185,425 GW2220O002 - CM - Customer Management (Sewer) 913,905 0 0 0 913,905 GW2230O001 - CC - Customer Connections (Water) 289,720 0 (404,000) (404,000) (114,280) GW2230O002 - CC - Customer Connections (Sewer) 636,510 0 (95,000) (95,000) 541,510 GW2240O005 - SS - Scientific Services (334,715) 0 301,500 301,500 (33,215) GW2260O001 - DS - Water - Operational Costs 1,219,606 0 0 0 1,219,606 GW2260O002 - DS - Sewer - Operational Costs 1,125,944 0 (100,000) (100,000) 1,025,944 GW2270O001 - IWP - Water - Operating 2,302,320 0 (183,500) (183,500) 2,118,820 GW2280O001 - AIP - Water - Operating 800 0 0 0 800 GW2280O002 - AIP - Sewer - Operating 116,000 0 (5,500) (5,500) 110,500 GW2280O003 - AIP – Unallocated – Operating 1,157,010 0 327,500 327,500 1,484,510 GW2290O001 - SCP - Sewer - Operating 2,305,000 0 (428,500) (428,500) 1,876,500 GW2300O001 - WMP - Operations 529,830 0 6,500 6,500 536,330 GW2310O001 - EM - Operations 1,009,550 0 0 0 1,009,550 GW4810I001 - CMU - SLA – CMU to Corporate (4,350,997) 0 0 0 (4,350,997) TOTAL 0 0 0 0 0

773rd Council Meeting 14 May 2019 32 Special Budget & Finance Committee Meeting 13 May 2019 Adopted Report

ITEM 2 (Continued) WATER AND SEWERAGE SERVICES MARCH 2019 BUDGET REVIEW FN334/252/19(P8) Attachment 3.1 WATER AND SEWERAGE SERVICES CAPITAL PROGRAM MOVEMENT MARCH 2019 BUDGET REVIEW

2018-19 MAR 2018-19 2018-19 2018-19 2018-19 REVIEW PROJECT DESCRIPTION SEP DEC M AR INITIAL BUDGET MOVEMENT FORECAST FORECAST FORECAST ($)

Long Term Recycled Water Release STAGE 1 31,900,000 31,900,000 31,900,000 37,400,000 5,500,000

Sewer Gravity Main Renewals 2018-19 4,000,000 5,000,000 5,000,000 5,000,000 0

Water Meter Replacements 2018-19 3,600,000 3,600,000 3,600,000 3,904,500 304,500

Potable Water Filling Stations 3,680,000 3,680,000 3,680,000 3,680,000 0

Water Main Replacements 2018-19 1,950,000 1,950,000 1,950,000 3,065,000 1,115,000

Elanora STP Digester A Sludge Heater Ref 1,850,000 1,850,000 1,850,000 3,000,000 1,150,000

SPS Switchboard Renewals 2017-19 2,050,000 2,850,000 2,850,000 2,850,000 0

Hydrant Replacements 2018-19 1,500,000 1,500,000 1,500,000 1,500,000 0

Fall from heights prevention SPS 1,600,000 1,600,000 1,600,000 1,477,500 (122,500)

STP Mech Elec Renewals 2018-19 1,000,000 1,000,000 1,000,000 1,342,000 342,000

Sandy Creek Industrial Precinct Sewer 709,000 2,600,000 2,600,000 1,342,000 (1,258,000)

Water Minor Civil Works 2018-19 900,000 900,000 900,000 1,241,500 341,500

Stapylton Catchment Diversion Stage 2 500,000 1,500,000 1,500,000 1,200,000 (300,000)

SPS Mech Elec Renewals 18-19 850,000 850,000 850,000 1,144,000 294,000

Coombabah STP Stage 6 Upgrade 2,500,000 2,500,000 2,500,000 1,045,000 (1,455,000)

Pimpama to Coombabah STP Release Main 6,200,000 3,200,000 3,200,000 1,000,000 (2,200,000)

Sewer Minor Civil Works 2018-19 1,000,000 1,000,000 1,000,000 1,000,000 0

Creek St Pimpama SPS & RM (Pimpama Village) - 985,000 985,000 985,000 0

STP Civil Renewals 2018-19 850,000 850,000 850,000 850,000 0

SPS Civil Renewals 2018-19 800,000 800,000 800,000 850,000 50,000

Proactive Water Service Replacements 2018-19 780,000 780,000 780,000 816,000 36,000

Pimpama Regional SPS & RM (Pimpama Jacobs Well Rd) - 772,000 772,000 772,000 0

Sewer Pressure Main Renewals 2018-19 1,750,000 750,000 750,000 750,000 0

Long Term Recycled Water Release STAGE 2 700,000 700,000 700,000 723,500 23,500

Recycled Water Network Expansion 1,500,000 1,500,000 1,500,000 708,500 (791,500)

Sewer Maintenance Hole Rehab 2018-19 2,825,000 2,620,000 2,620,000 650,000 (1,970,000)

Reservoir Refurbishments 2018-19 700,000 700,000 700,000 650,000 (50,000)

Long Term Recycled Water Release Elanora / Merrimac 300,000 600,000 600,000 626,500 26,500

Coombabah STP Digesters – Supply and Install Cogeneration Unit 1,813,000 700,000 700,000 600,000 (100,000)

Bloom Subdivision Trunk MH Works 2017-18 - 514,000 514,000 564,000 50,000

Elanora STP Bioreactor Electrical Cable Replacement - - 550,000 550,000 0

WPS Switchboard Renewals 2018-19 300,000 300,000 300,000 548,000 248,000

Water Loss Management - Establishment of New DMAs - 515,000 515,000 515,000 0

Stapylton Catchment Diversion Stage 1 500,000 500,000 500,000 500,000 0

Sewage Pump Station A5 Emergency Storage Upgrade 360,000 735,000 735,000 500,000 (235,000)

Coombabah STP Pipework Replacement 230,000 250,000 250,000 500,000 250,000 Fire Fighting Capacity Aug Phase 1 - 500,000 500,000 500,000 0

773rd Council Meeting 14 May 2019 33 Special Budget & Finance Committee Meeting 13 May 2019 Adopted Report

ITEM 2 (Continued) WATER AND SEWERAGE SERVICES MARCH 2019 BUDGET REVIEW FN334/252/19(P8) Attachment 3.2

WATER AND SEWERAGE SERVICES CAPITAL PROGRAM MOVEMENT MARCH 2019 BUDGET REVIEW Continued

2018-19 MAR 2018-19 2018-19 2018-19 2018-19 REVIEW PROJECT DESCRIPTION SEP DEC M AR INITIAL BUDGET MOVEMENT FORECAST FORECAST FORECAST ($)

Reservoir Valve Replacements 18-19 250,000 750,000 750,000 470,000 (280,000)

STP Mechanical and Electrical Renewals 2017-18 - 59,500 59,500 460,000 400,500

Smart Metering Solution 237,000 237,000 237,000 458,000 221,000

Installation of Conduits in the OX20 catchment - 220,000 220,000 388,000 168,000

GC Infrastructure Protection Water 2014-17 - 48,000 293,000 385,000 92,000

Foxwell Rd Gravity Trunk Sewer - - - 350,000 350,000

Water Main Replacements 2017-18 - 300,000 300,000 300,000 0

CO13 Vacuum Pump Station Upgrade 900,000 900,000 900,000 278,500 (621,500)

STP Process Tank Refurbishment 2018-21 1,434,000 700,000 700,000 250,000 (450,000)

Minor Equipment Replacements Wtr Network 250,000 250,000 250,000 250,000 0

Pines Golf Course Water Main Reline - 240,000 240,000 240,000 0

Coombabah STP Liquid Waste Receival Facility 2,400,000 625,000 625,000 228,000 (397,000)

Pimpama STP Stage 2 Works 900,000 700,000 700,000 225,000 (475,000)

Sewer Minor Civil Works 2017-18 - 180,000 180,000 223,500 43,500

Bonogin Road Potable Water Pump Station PMU9 Removal - - - 210,000 210,000

Sewer Pressure Main Renewals 2017-18 - 50,000 100,000 210,000 110,000

B47 SPS Odour Control Unit and Asbestos Pipe Replacement - 148,000 185,000 186,500 1,500

STP SCADA Upgrade 2018-19 100,000 100,000 100,000 180,000 80,000

UAS Sewer Reline Rectification - Phase 2 - 175,000 175,000 168,500 (6,500)

SPS Network Optimisation - - - 165,000 165,000

Water Asset Conflict Renewals 2018-19 500,000 500,000 500,000 150,000 (350,000)

Sewer Asset Conflict Renewal 2018-19 500,000 250,000 250,000 150,000 (100,000)

Sewer Rising Main Renewals 2016-17 - 20,000 20,000 142,500 122,500

CWG Sewer Maintenance Holes 16-17 & 17-18 - - - 135,000 135,000

WPS Civil Renewals 2018-19 125,000 125,000 125,000 125,000 0

Water Minor Civil Works 2017-18 - 60,000 60,000 121,000 61,000

Sewer Gravity Main Renewals 2017-18 400,000 200,000 200,000 115,500 (84,500)

Recycled Water Meter Replacement 2018-19 200,000 200,000 200,000 100,000 (100,000)

SPS Wet Well Relining 2018-20 180,000 450,000 450,000 100,000 (350,000)

Merrimac STP PTA Penstock 100,000 100,000 100,000 100,000 0

SPS SCADA Upgrade 2017-19 100,000 100,000 100,000 92,500 (7,500)

Benowa A102 Sewer Rising Main Stage 1 - - 85,000 85,000 0

Product Monitoring - Scientific Services 80,000 80,000 80,000 80,000 0

Bermuda St 750mm Effluent Main Replacement - 55,000 55,000 65,000 10,000

Drinking Water Sample Station Upgrade - 50,000 50,000 55,500 5,500 Proactive Water Service Replacements 2017-18 - - - 54,500 54,500

773rd Council Meeting 14 May 2019 34 Special Budget & Finance Committee Meeting 13 May 2019 Adopted Report

ITEM 2 (Continued) WATER AND SEWERAGE SERVICES MARCH 2019 BUDGET REVIEW FN334/252/19(P8) Attachment 3.3

WATER AND SEWERAGE SERVICES CAPITAL PROGRAM MOVEMENT MARCH 2019 BUDGET REVIEW Continued

2018-19 MAR 2018-19 2018-19 2018-19 2018-19 REVIEW PROJECT DESCRIPTION SEP DEC M AR INITIAL BUDGET MOVEMENT FORECAST FORECAST FORECAST ($)

Water Pumping Station BU1 Upgrade 150,000 50,000 50,000 50,000 0

Coombabah STP Screening Grit Removal Upgrade - 50,000 50,000 50,000 0

Yatala Industrial Park Water Main - 43,000 43,000 43,000 0

Merrimac West Sewer Augmentation - 30,000 30,000 39,000 9,000

WPS Mech and Elec Renewals 2019-21 - - - 35,000 35,000

SPS Mech elec Renewals 17-18 - 25,500 25,500 28,000 2,500

WPS Mech & Elec Renewals 2017-18 - 52,000 52,000 26,000 (26,000)

Stapylton Jacobs Well Rd Water Main DN200 1,800,000 300,000 300,000 20,000 (280,000)

Reservoir Water Quality Improvements - - - 20,000 20,000

Waterway Downs Regional SPS and Rising Main - 8,000 8,000 20,000 12,000

Benowa A102 Sewer Rising Main Stage 2 200,000 200,000 200,000 15,000 (185,000)

Gooding Dr Merrimac Install Wtr Valves - 200,000 200,000 15,000 (185,000)

SPS Emergency Storage Augmentations - 11,000 11,000 14,000 3,000

STP Process Tank Refurbishment - 8,000 8,000 12,500 4,500

STP Civil Renewals 2017-18 - - - 11,000 11,000

Coomera Urban Village Gravity Trunk Sewer, Stage 1B - 583,000 583,000 10,000 (573,000)

SPS SCADA Upgrade 2018-20 - - - 7,500 7,500

Water Asset Conflicts 2017-18 - - - 6,500 6,500

CWG WFM Duplication to Coombabah STP - 15,000 15,000 5,000 (10,000)

New Water Mains in Coomera 1,905,000 5,000 5,000 3,000 (2,000)

New Water Mains in Pimpama & Willow Vale 260,000 5,000 5,000 3,000 (2,000)

New Sewer Pump Station - Stapylton 195,000 5,000 5,000 3,000 (2,000)

George Alexander Way Water Main 130,000 5,000 5,000 3,000 (2,000)

Stanmore Rd Regional SPS BE44B and Rising Main - - - 3,000 3,000

Meter Connections 125,000 100,000 100,000 2,000 (98,000)

Unidentified Trunk Sewer Infrastructure 500,000 500,000 500,000 - (500,000)

SPS OD1 Odour Control Upgrade 500,000 - - - 0

Symonds Rd RM and SPS B49 Diversion 300,000 - - - 0

Reservoir Refurbishments 2017-18 250,000 - - - 0

29-31 Lather and 38 Queen Streets Southport, Gravity Trunk Sewer 242,000 - - - 0

Fire Fighting Capacity Aug Phase 2 220,000 - - - 0

Sewer and Non Drinking Main Cathodic Protection 18-19 150,000 - - - 0

Water Main Cathodic Protection 2018-19 100,000 - - - 0

Unidentified Trunk Water Infrastructure 100,000 100,000 100,000 - (100,000)

Portable Reservoir - 150,000 150,000 - (150,000)

WW Solar Phase 1 2019-21 - - - - 0

Control Project (to hold balance of budget) - 2,071,000 1,104,000 - (1,104,000)

CWG Sewer Gravity Main Relines 16-17 &17-18 - 40,000 40,000 - (40,000) $ 94,980,000 $ 94,980,000 $ 94,980,000 $ 92,092,000 ($2,888,000)

773rd Council Meeting 14 May 2019 35 Special Budget & Finance Committee Meeting 13 May 2019 Adopted Report

ITEM 2 (Continued) WATER AND SEWERAGE SERVICES MARCH 2019 BUDGET REVIEW FN334/252/19(P8) Attachment 4.1

WATER AND SEWERAGE SERVICES OPERATIONAL PROGRAM MOVEMENT MARCH 2019 BUDGET REVIEW (by budget centre)

2018-19 2018-19 2018-19 2018-19 MAR 2018-19 PROJECT DESCRIPTION SEP DEC MAR REVIEW INITIAL BUDGET FORECAST FORECAST FORECAST MOVEMENT WPS Decommissioning 2017-19 165,000 165,000 165,000 - (165,000) Total for budget centre GW2020C001 165,000 165,000 165,000 - (165,000) SPS Decommissioning 2017-19 165,000 165,000 165,000 - (165,000) Total for budget centre GW2020C002 165,000 165,000 165,000 - (165,000) Water Main Condition Assessment FY18-19 250,000 250,000 250,000 212,000 (38,000) Water Main Decommissioning FY18-19 150,000 150,000 150,000 146,000 (4,000) Water Valve & Pit Condition Assessment FY18-19 120,000 120,000 120,000 124,500 4,500 Gold Coast Light Rail (GCLR) Stage 3 preliminary investigations 30,000 62,000 62,000 88,000 26,000 Reservoir Structural Condition Assessment 2017-18 - 40,000 40,000 64,000 24,000 Assessment of Water Main CP System 18-19 50,000 50,000 50,000 10,000 (40,000) Reservoir Condition Assessment 18-19 75,000 75,000 75,000 - (75,000) Total for budget centre GW2030O001 675,000 747,000 747,000 644,500 (102,500) Gravity Sewer Network Assessment Program 2018-19 900,000 808,500 808,500 768,000 (40,500) Maintenance Hole Condition Assessment 2017-18 - 370,500 370,500 494,500 124,000 Vacuum System Assessments 100,000 100,000 100,000 127,000 27,000 Sewer Pressure Valve & Pits Condition Assessment 18-19 120,000 120,000 120,000 126,500 6,500 Sewer Mains Decommissioning 2018-19 100,000 100,000 100,000 100,000 - OX20 Vacuum Sewer Optimisation Assessment - - - 80,000 80,000 Sewer Pressure Main Condition Assessment FY18-19 50,000 50,000 50,000 25,000 (25,000) Assess Sewer & Non-Drinking Water Cathodic Protection 18-19 75,000 75,000 75,000 20,500 (54,500) M1 Upgrade, Mudgeeraba to Varsity Lakes, 2017-19 50,000 50,000 50,000 16,000 (34,000) Effluent Main Condition Assessment 18-19 25,000 25,000 25,000 12,500 (12,500) Maintenance Hole Condition Assessment 18-19 813,000 513,000 513,000 1,000 (512,000) Assessment of sewer branch lines 2018-19 150,000 150,000 150,000 - (150,000) Sewer Pipeline Condition Assessment Software Upgrade 50,000 50,000 50,000 - (50,000) Total for budget centre GW2030O002 2,433,000 2,412,000 2,412,000 1,771,000 (641,000) GCRT Stage 1 Defect Repairs - 82,000 82,000 82,000 - Southport-Burleigh Road Upgrade – Asset Conflicts - 170,500 170,500 40,000 (130,500) Total for budget centre GW2040O001 - 252,500 252,500 122,000 (130,500) Business Transformation Program 18-19 500,000 500,000 616,000 1,196,000 580,000 Project Evolve 401,930 1,035,000 1,035,000 936,500 (98,500) Grange Water Remediation and Enhancements - - 824,000 728,500 (95,500) Utility Network Tools - - 173,000 205,000 32,000 WW LoB Systems Lifecycle Mgmt 2018-19 200,000 200,000 200,000 91,000 (109,000) Tariff Review Part 2 50,000 80,000 80,000 86,000 6,000 Waste Management Tariff Reform 30,000 60,000 60,000 71,000 11,000 Total for budget centre GW2110O003 1,181,930 1,875,000 2,988,000 3,314,000 326,000

773rd Council Meeting 14 May 2019 36 Special Budget & Finance Committee Meeting 13 May 2019 Adopted Report

ITEM 2 (Continued) WATER AND SEWERAGE SERVICES MARCH 2019 BUDGET REVIEW FN334/252/19(P8) Attachment 4.2

WATER AND SEWERAGE SERVICES OPERATIONAL PROGRAM MOVEMENT MARCH 2019 BUDGET REVIEW (by budget centre) Continued

2018-19 2018-19 2018-19 2018-19 MAR 2018-19 PROJECT DESCRIPTION SEP DEC MAR REVIEW INITIAL BUDGET FORECAST FORECAST FORECAST MOVEMENT Urban Artwork on Gold Coast Water and Waste (GCWW) Assets 50,000 173,000 173,000 252,000 79,000 Gold Coast Tap Water Marketing Program - 98,000 98,000 100,000 2,000 Total for budget centre GW2140O003 50,000 271,000 271,000 352,000 81,000 OSI PI Development - - - 12,000 12,000 Total for budget centre GW2190O002 - - - 12,000 12,000 Elanora STP Aeration Upgrade Planning 62,500 62,500 62,500 500 (62,000) SCADA Energy Management System 10,000 - - - - Total for budget centre GW2210O002 72,500 62,500 62,500 500 (62,000) Meter Specification Guidelines revision 2018-19 60,000 60,000 60,000 60,000 - Smart Metering Solution 164,626 165,000 165,000 36,000 (129,000) Meter Reading Read Optimisation 2018-19 25,000 25,000 25,000 25,000 - Stapylton Area Data Logging 17-18 - 24,000 24,000 24,000 - Total for budget centre GW2230O001 249,626 274,000 274,000 145,000 (129,000) Development of the Recycled Water Mgt Plan 553,000 553,000 553,000 488,000 (65,000) Water Demand Management 150,000 150,000 150,000 150,000 - Potable Water Network Disinfection Improvement 100,000 100,000 100,000 101,000 1,000 Energy Interventions at GCWW Facilities 25,000 60,000 60,000 60,000 - Water Loss Management Plan 50,000 50,000 50,000 50,000 - Intelligent Water Network Study 50,000 50,000 50,000 500 (49,500) Total for budget centre GW2270O001 928,000 963,000 963,000 849,500 (113,500) City Plan Holding Capacity - Time Horizon Study - 66,000 66,000 60,500 (5,500) Total for budget centre GW2280O002 - 66,000 66,000 60,500 (5,500) LGIP2 Water Sewer Infra Planning 630,000 630,000 821,000 833,500 12,500 Q00830 Springbrook Groundwater Study - - - 30,000 30,000 Q00829 Citywide Erosion and Sediment Control Review - - - 20,000 20,000 Total for budget centre GW2280O003 630,000 630,000 821,000 883,500 62,500 Stapylton Sewerage, Pimpama and Merrimac STP Capacity Review - 130,000 130,000 146,500 16,500 Sewer Corrosion Modelling for Coombabah Sewerage Catchment 50,000 177,000 177,000 105,000 (72,000) Rain-Dependent Inflow Management Pilot 195,000 132,000 132,000 79,000 (53,000) Bio-resource Management Strategy - Market Analysis - 85,000 85,000 60,000 (25,000) Sewer Corrosion and Odour Mdling H'vale 50,000 50,000 50,000 50,000 - Air Dispersion Modelling SPS - 25,000 25,000 - (25,000) Baseline Odour Dispersion Coombabah STP - 15,000 15,000 - (15,000) Total for budget centre GW2290O001 295,000 614,000 614,000 440,500 (173,500) Solid Waste Infrastructure Planning Program 180,000 180,000 180,000 223,000 43,000 Helensvale WRC Environmental Compliance - 63,000 63,000 53,500 (9,500) WRC Network Infrastructure Review - 40,000 40,000 13,000 (27,000) Total for budget centre GW2300O001 180,000 283,000 283,000 289,500 6,500 $ 7,025,056 $ 8,780,000 $ 10,084,000 $ 8,884,500 ($1,199,500)

773rd Council Meeting 14 May 2019 37 Special Budget & Finance Committee Meeting 13 May 2019 Adopted Report

ITEM 2 (Continued) WATER AND SEWERAGE SERVICES MARCH 2019 BUDGET REVIEW FN334/252/19(P8) Attachment 4.3

CATCHMENT MANAGEMENT OPERATIONAL PROGRAM MOVEMENT MARCH 2019 BUDGET REVIEW

2018-19 2018-19 2018-19 2018-19 MAR 2018-19 PROJECT DESCRIPTION SEP DEC MAR REVIEW INITIAL BUDGET FORECAST FORECAST FORECAST MOVEMENT City Flows Monitoring Program - - - 250,000 250,000 Catchment Management Data Management System 100,000 107,500 107,500 200,000 92,500 Albert River Catchment Rehabilitation Program - 122,000 122,000 158,500 36,500 Catchment Management Decision Tools - 26,000 26,000 111,500 85,500 Flat Rock Creek Naturalisation Project - 90,000 90,000 90,000 - Recreational Water Quality Monitoring Program and Process Review - 48,000 48,000 49,000 1,000 Pimpama River Waterway Assessment - - - - - Coomera River Weir Fish Passage Project - - - - - Total for budget centre CS4810O003 100,000 393,500 393,500 859,000 465,500 $ 100,000 $ 393,500 $ 393,500 $ 859,000 $ 465,500

773rd Council Meeting 14 May 2019 38 Special Budget & Finance Committee Meeting 13 May 2019 Adopted Report

ITEM 3 WATER AND WASTE WASTE SERVICES MARCH 2019 BUDGET REVIEW FN334/252/19(P8) Refer 5 page attachment

1 BASIS FOR CONFIDENTIALITY

Not Applicable.

2 EXECUTIVE SUMMARY

Not Applicable.

3 PURPOSE OF REPORT

The purpose of this report is to provide an overview of budget adjustments proposed for Waste Services at the March 2019 Budget Review.

4 PREVIOUS RESOLUTIONS

Ex Minute No G18.0621.032

The City’s 2018-19 Budget was adopted by Council at the Budget Meeting held on 21 June 2018.

Ex Minute No B17.1207.003

1 That Council approve the net increase of $2.3 million to be transferred to the Waste Management Reserve. 2 That Council note budget variations per Attachments 2 and 3 are included in the September 2017 Budget Review.

Ex Minute No G19.0130.031

1 That Council approve the decrease of $0.2 million to be transferred from the Waste Management Reserve, with total anticipated transfer from Reserve now being $1.4 million for the 2018-19 financial year. 2 That Council note budget variations per Attachments 2 and 3 are included in the December 2018 Budget Review.

5 DISCUSSION

5.1 Introduction

The Local Government Act 2009 allows a Local Government to amend its budget for the financial year at any time before the year ends, by way of resolution. The City of Gold Coast Budget Review Policy requires any variations to the budget to be submitted to Council for approval through the quarterly budget review process.

The current City of Gold Coast Budget Review Policy states that all reports dealing with budget variations or budget transfers must be referred to Special Budget Committee.

773rd Council Meeting 14 May 2019 39 Special Budget & Finance Committee Meeting 13 May 2019 Adopted Report

ITEM 3 (Continued) WASTE SERVICES MARCH 2019 BUDGET REVIEW FN334/252/19(P8)

5.2 Budget Adjustments Summary

Proposed budget adjustments for the March 2019 Budget Review are set out in Table 1. These items are explained in detail in the following sections.

Mar 19 Dec 18 2018-19 Mar v Dec Summary Income Statement Review Review Initial Movement Year Ended 30th June 2019 ($M) ($M) ($M) ($M) % Operating Revenue 109.7 107.7 108.1 2.0 1.9 Operating Expenses 75.1 75.0 73.2 0.1 0.1 Operating Result 34.6 32.7 34.9 1.9 5.8 Depreciation / Amortisation 8.6 8.6 8.6 - - Earnings Before Interest and Taxa 26.0 24.1 26.3 1.9 7.8 Interest Expense (QTC loan) 3.8 3.8 3.9 - - Interest Margin Expense 0.1 0.1 0.1 - - Income Tax Eqivalents 7.9 7.9 7.9 (0.0) (0.4) Net Profit After Taxation 14.2 12.4 14.4 1.9 15.6 Dividend 7.7 7.7 7.7 - - Retained Earnings 6.5 4.7 6.7 1.9 41.2

Capital Expenditure 8.5 10.6 12.7 (2.1) (20.1) Total Capital Works Program Expe 8.5 10.6 12.7 (2.1) (20.1) Table 1: Summary of Budget Adjustments

5.3 Operating Revenue

An increase of $1.9 million in total operating revenue is proposed in the March Budget Review. Changes to the individual operating revenue items are set out in Table 2:

Mar 19 Dec 18 2018-19 Mar v Dec Operating Revenue Review Review Initial Movement Year Ended 30th June 2019 ($'000) ($'000) ($'000) ($'000) % Waste Utility Rate Revenue 84.0 84.0 84.0 - - Refuse Tipping Fees 7.2 8.2 8.3 (1.0) (11.7) Recycling Revenue 1.4 1.1 1.1 0.3 30.5 Fees & Charges 1.4 1.8 2.5 (0.4) (22.2) Internal Tipping Charges 10.3 7.8 7.8 2.5 32.0 Community Service Obligations 3.3 3.3 3.3 - - Interest on Outstanding Rates 0.3 0.1 0.2 0.2 450.0 Interest on Investments 1.0 1.0 0.6 - - Contributions & Donations Revenue 0.4 0.4 0.4 - - Other Operating Income 0.4 0.0 0.0 0.4 900.0 Total Operating Revenue 109.7 107.7 108.1 2.0 1.9 Table 2 – Movement in Operating Revenue

773rd Council Meeting 14 May 2019 40 Special Budget & Finance Committee Meeting 13 May 2019 Adopted Report

ITEM 3 (Continued) WASTE SERVICES MARCH 2019 BUDGET REVIEW FN334/252/19(P8)

5.3.1 Internal Tipping Charges – Increase of $2.5 million. Internal Tipping Charges being received from across the City are significantly ahead of forecast, predominantly due to the increased work program within the Transport & Infrastructure Directorate. This revenue stream is projected to reduce significantly in the 2019-20 financial year, once the new contractual arrangements associated with construction and demolition waste commences within the Transport & Infrastructure Directorate.

5.3.2 Other Operating Income – Increase of $0.4 million. Revenue has been received for the sale of carbon credits associated with the landfill gas electricity generation contract with LMS. No budget allocation was included in the Initial Budget as this revenue is sporadic and cannot readily be projected.

5.3.3 Recycling Revenue – increase of $0.3 million. This increased revenue projection relates to scrap steel sales. Commodity prices are slightly higher than the average price last year, however the main reason for this increase is a higher recovery rate than anticipated. Average monthly tonnages have been almost 200 tonnes higher than last year due to a combination of better resource recovery activities and increased visitor numbers.

5.3.4 Interest on Outstanding Rates – Increase of $0.2 million. Debt recovery activities were expected to be enhanced this financial year, so the budget allocation was reduced as part of the initial budget preparation. The enhancement of recovery activities has been delayed following the implementation of the new rates billing system. As a result, levels of outstanding rate balances have not reduced as expected and interest on those balances remains at similar levels to previous years.

5.3.5 Refuse Tipping Fees – decrease of $1.0 million. Refuse Tipping Fees collected at our landfills is proposed to be reduced as volumes of chargeable waste being taken to landfill is lower than anticipated. A privately owned and operated facility has opened in close proximity to Stapylton landfill which is likely impacting volumes being disposed at Stapylton.

5.3.6 Fees & Charges – decrease of $0.4 million. "Right for Service" revenue is lower than projected due to the re-use of bins that became available as a result of the 2017-18 promotional campaign to upsize recycling bins. Re-used bins do not attract a 'right for service' payment.

773rd Council Meeting 14 May 2019 41 Special Budget & Finance Committee Meeting 13 May 2019 Adopted Report

ITEM 3 (Continued) WASTE SERVICES MARCH 2019 BUDGET REVIEW FN334/252/19(P8)

5.4 Operating Expenditure The following graph provides a breakdown of Waste Services operating expenditure. Waste Collection Payments are the largest operating cost for the business unit, representing 38 per cent of total operating expenses.

Graph 1 – Waste Services operating expenditure by category

As shown in Table 3, an increase of $0.1 million in operating expenses, is proposed as part of the March 2019 Budget Review.

Mar 19 Dec 18 2018-19 Mar v Dec Operating Expenses Review Review Initial Movement Year Ended 30th June 2019 ($'000) ($'000) ($'000) ($'000) % Employee Expenses 9.6 9.7 8.9 (0.1) (1.1) Materials and Services 13.0 16.0 15.8 (3.0) (19.0) Council Corporate SLA 2.7 2.7 2.7 - - Internal Directorate SLA 3.3 3.3 3.3 - - Waste Collection Payments 28.5 27.6 27.6 0.9 3.1 Fleet and Plant 13.4 11.5 10.9 1.9 16.2 Consultants 1.9 1.5 1.2 0.4 27.7 Electricity 0.1 0.1 0.1 - - Insurance Premiums 0.1 0.1 0.1 - - Other Expenditure 2.5 2.5 2.5 - - Total Operating Expenses 75.1 75.0 73.2 0.1 0.1 Table 3 - Movement in Operating Expenses

773rd Council Meeting 14 May 2019 42 Special Budget & Finance Committee Meeting 13 May 2019 Adopted Report

ITEM 3 (Continued) WASTE SERVICES MARCH 2019 BUDGET REVIEW FN334/252/19(P8)

5.4.1 Employee Expenses – decrease of $0.1 million. Major contributors of this movement are:

• Protective Services Officers – decrease of $350k. As part of the September 2018 budget review, additional funding was included to implement the planned utilisation of Protective Security Officers to operate existing weighbridges at the City’s Waste and Recycling Centres and Landfills (refer Resolution # WW18.0524.006). This implementation has now occurred, however a portion of the additional costs have been deferred to the 2019-20 financial year. • State Government Waste Disposal Levy Readiness – increase of $160k. Additional resourcing required to prepare for the implementation of the State Government Waste Disposal Levy, which takes effect from 1 July 2019.

5.4.2 Materials and services – decrease of $3.0 million. Major contributors to this decrease are:

• Leachate removal – decrease $2.0 million. Leachate removal costs at landfills are significantly lower than forecast, partially due to drier weather conditions, but largely as a result of approximately 50% of leachate now being disposed via the Coombabah Sewage Treatment Plant, at a much lower cost than contractual transport and disposal costs; and • Wheelie Bin Acquisitions and Maintenance – decrease $0.8 million. Projected costs are lower than originally forecast, largely due to the availability of bins for re- use following the 2017-18 promotional campaign to upsize wheelie bins. As noted above, the re-use of these bins does not attract 'right for service' payments, but reduces the cost incurred to purchase new bins when bins require replacement. • Capping of Molendinar Landfill – decrease of $.025 million. Ongoing capping and remediation planning has resulted in the deferral of works to 2019-20.

5.4.3 Waste Collection Payments – increase of $0.9 million. This increase relates to contract costs for kerbside collection of:

• Recycling Bin Services – increase $0.3 million. • General Waste Bins Services – increase $0.6 million.

The CPI increases applied in accordance with current contractual arrangements has been significantly higher than forecast when the 2018-19 budget was initially prepared.

5.4.4 Fleet and Plant – increase of $1.9 million. The recent introduction of more stringent stormwater discharge quality criteria has necessitated the procurement of additional water trucks to disperse stormwater across the landfill site, rather than discharging to the environment. Further, general operational plant hire costs are significantly higher than projected.

773rd Council Meeting 14 May 2019 43 Special Budget & Finance Committee Meeting 13 May 2019 Adopted Report

ITEM 3 (Continued) WASTE SERVICES MARCH 2019 BUDGET REVIEW FN334/252/19(P8)

5.4.5 Consultants – increase of $0.4 million. Major contributors to this budget movement are:

. State Government Waste Disposal Levy Readiness – increase of $0.3 million. Additional funding for consultancy requirements to ensure the City's systems are ready for implementation of the Levy.

. Waste Collections Contract and CWCA Review – decrease of $0.18 million. Revised project schedule has resulted in the deferral of works to 2019-20.

. Review Landfill Site Operational Plans – decrease of $0.16 million: Revised project schedule has resulted in the deferral of works to 2019-20.

Refer to Attachments 2 and 4 for a listing of all budget movements.

5.5 Community Services Obligations

The Local Government Regulation 2012 defines a Community Service Obligation (CSO) as an obligation the local government imposes on a business unit to do something that is not in the commercial interests of the business unit to do. The Regulation determines the CSO amount is to be treated as revenue of the business unit for an amount equal to the cost of carrying out the obligation, less any revenue arising from carrying out the activity.

Table 6 provides a summary of CSO’s currently provided within Waste Services. The CSO budget remains unchanged following this budget review.

Mar 19 Dec 18 2018-19 Mar v Dec Community Service Obligations Review Review Initial Movement Year Ended 30th June 2019 ($M) ($M) ($M) ($M) % M vt Disposal Costs for "Free of Charge" approved 0.56 0.56 0.56 0.00 0.00 charities and organisations Contributions and Donations 0.49 0.49 0.49 0.00 0.00 Foregone revenue E-Waste Social Outcomes 0.10 0.10 0.10 0.00 0.00 Waste Collections - Dead Animal Collection 0.06 0.06 0.06 0.00 0.00 - Clean Up Australia Day 0.02 0.02 0.02 0.00 0.00 - Street and Park bin services 0.37 0.37 0.37 0.00 0.00 - South Stradbroke Island Waste Management 0.46 0.46 0.46 0.00 0.00 - Annual Kerbside Cleanup 1.19 1.19 1.19 0.00 0.00 Total Community Service Obligations 3.25 3.25 3.25 0.00 0.00 Table 6 – Movement in Community Service Obligations

5.6 Capital Works Program Movements

The 2018-19 initial approved capital works program included works totalling $12.73 million with no net movement to the total budget during the September 2018 budget review. A decrease of $2.15 million or 17% was approved following the December 2018 budget review. A further decrease of $2.12 million or 20% is proposed in the March 2019 budget review.

773rd Council Meeting 14 May 2019 44 Special Budget & Finance Committee Meeting 13 May 2019 Adopted Report

ITEM 3 (Continued) WASTE SERVICES MARCH 2019 BUDGET REVIEW FN334/252/19(P8)

Table 7 provides a summary of proposed capital expenditure at a program level.

Water and Waste Waste Services Capital Program

Mar 19 Dec 18 Sept 18 2018-19 Mar v Dec Program Review Review Review Initial Movement

($M) ($M) ($M) ($M) Mvt ($) Mvt (%) Landfills 5.77 8.51 9.63 9.78 (2.74) (32%) Waste and Recycling Centres 2.68 2.06 2.59 2.45 0.62 30% Fleet and Plant 0.00 0.00 0.50 0.50 0.00 -

Total Capital Expenses 8.45 10.58 12.73 12.73 (2.12) (20%) Table 7 – Capital Expenditure

The significant movements within the Waste program are:

. $1.93 million decrease in Reedy Creek Landfill Cells 3 and 4. A contract was awarded in March 2019 for this multi-year project. A revised project schedule has resulted in some construction works being deferred to 2019-20.

. $0.64 million decrease in SCADA Installation. Some scope was brought forward and delivered in 2017-18, with final scope delivered in 2018-19. Remaining budget is not required.

. $0.42 million decrease in Merrimac Green Waste Pad. Final costs to construct the green waste pad at Merrimac were lower than originally estimated due to the works being completed by Transport and Infrastructure using recycled materials from the Reedy Creek site. Remaining budget is not required.

. $0.43 million increase in Recycle Street and Wayfinding 2018-19. Additional scope has been included for delivery, resulting in the design, construction and implementation of Recycle Street and signage into the customer interface at three WRC sites (Molendinar, Reedy Creek and Merrimac).

. $0.39 million increase in Coomera WRC Stage 1. Stage 1 scope included the construction of the green waste pad at Coomera. These works were identified late in 2018-19 and therefore not included in the initial budget. Budget is required to cover the construction costs. Works are now complete and the site is operational.

773rd Council Meeting 14 May 2019 45 Special Budget & Finance Committee Meeting 13 May 2019 Adopted Report

ITEM 3 (Continued) WASTE SERVICES MARCH 2019 BUDGET REVIEW FN334/252/19(P8)

Six projects are currently in delivery phase, representing 61% of the total Waste Services capital program, with the remainder mostly divided between the Procurement / Specification (23%) and Planning (13%) phases, as detailed in Table 8. Work will continue to progress projects through the project lifecycle, delivering the program of work by financial year end.

Water and Waste Waste Services Capital Program % of Mar 19 Dec 18 Sept 18 2018-19 Delivery Phase Program Review Review Review Initial No of Projects Value ($M) ($M) ($M) ($M)

Planning 0.21 2.60 4.97 5.77 9 2% Initiation 1.07 0.00 0.00 0.00 2 13% Procurement / Specification 1.92 3.00 2.78 2.08 7 23% Delivery 5.17 4.88 4.88 4.88 6 61% Closure 0.09 0.09 0.09 0.00 1 1% Total 8.45 10.58 12.73 12.73 25 100% Table 8 – Project Phase

Refer to Attachment 3 for a detailed listing of all movements within the Capital Program for 2018-19.

5.7 Income Tax Equivalents – decrease $0.03 million

The initial adopted budget projected Income Tax Equivalents payments totalling $7.94 million for the current year. This estimate has been reduced by $0.03 million to $7.91 million at this review.

In order to minimise impacts to the City’s overall budget position throughout the year, Council determined that income tax equivalents movements would be held within the waste services’ accounts until the final budget review of each financial year. Income tax equivalents as a result of movements identified throughout the year have now been recognised as part of the March budget review.

773rd Council Meeting 14 May 2019 46 Special Budget & Finance Committee Meeting 13 May 2019 Adopted Report

ITEM 3 (Continued) WASTE SERVICES MARCH 2019 BUDGET REVIEW FN334/252/19(P8)

5.8 Distribution of Earnings before Interest and Tax (EBIT)

Following the adjustments outlined in this report, 2018-19 Earnings before Interest and Tax (EBIT), on a cash basis, is estimated at $34.6 million (operating revenue of $109.7 million less operating expenditure of $75.1 million).

Mar 19 Dec 18 2018-19 Mar v Dec Distribution of Earnings Review Review Initial Movement Year Ended 30th June 2019 ($'000) ($'000) ($'000) ($'000) % Interest Expense (External) 3.8 3.8 3.9 - - Principal Repayment (External) 7.7 7.7 7.8 - - Debt Service Payment 11.5 11.5 11.7 - - Capital Expenditure 8.4 10.6 12.7 (2.2) (21.0) Loan Funding (3.3) (4.9) (5.6) 1.6 (33.6) Net Capital Expenditure 5.1 5.7 7.1 (0.6) (10.2) Tax Equivalents (30% taxable earning 7.9 7.9 7.9 (0.0) (0.4) Dividend 7.7 7.7 7.7 - - Interest Expense Margin 0.1 0.1 0.1 - - Payments to Council (Excluding SLA, Fleet and Plant and 15.7 15.7 15.7 (0.0) (0.2) Land Tax) Transfer to Reserves 2.3 (0.2) 0.2 2.5 (1,321.7) Total Distribution 34.6 32.7 34.7 1.9 5.8 * SLA, Fleet & Plant and Land Tax payments are further payments to Council which are recorded within Waste’s Operating Expenses and are therefore not reported as part of the Distribution of Earnings. Table 9 – Distribution of Earnings

The net impact of movements within this review is an increase of $2.5 million in transfer to waste management reserve. This movement is primarily due to the increase in Internal Tipping revenues, combined with the reduced funding required for capital expenditure.

5.9 Waste Management Reserve

Cash surpluses from Waste Management operations are transferred to the Waste Management Reserve. These cash reserves are being accumulated to provide for:

1. Future funding requirements for the replacement, renewal and expansion of assets required to deliver waste management services.

2. Landfill remediation and post-closure environmental monitoring requirements - considerable site closure and remediation costs will be incurred on landfill sites once they are exhausted.

With the movements processed at this budget review, the net change in reserve balance, as at 30 June 2019 is projected to be in the order of $38.3 million.

5.10 Returns to Community Waste Services operates as a commercial business enterprise and provides appropriate returns to the community, based on the community’s investment in the Waste Services business.

773rd Council Meeting 14 May 2019 47 Special Budget & Finance Committee Meeting 13 May 2019 Adopted Report

ITEM 3 (Continued) WASTE SERVICES MARCH 2019 BUDGET REVIEW FN334/252/19(P8)

Projected returns payable to the Community for the year ended 30 June 2019, are slightly decreasing by $0.03 million as a result of reduced tax equaivalents.

Mar 19 Dec 18 2018-19 Mar v Dec Returns to Community Review Review Initial Movement Year Ended 30th June 2019 ($'000) ($'000) ($'000) ($'000) % Interest Margin Expense 0.1 0.1 0.1 - - Income Tax 7.9 7.9 7.9 (0.0) (0.0) Land Tax 2.5 2.5 2.5 - - Dividend 7.7 7.7 7.7 - - Returns to Community 18.2 18.2 18.2 (0.0) 0.0 (Exc SLA, Insurance Premiums and Fleet and Plant) Table 10 – Returns to Community

6 ALIGNMENT TO THE CORPORATE PLAN, CORPORATE STRATEGIES AND OPERATIONAL PLAN

Not Applicable.

7 FUNDING AND RESOURCING REQUIREMENTS

Not Applicable.

8 RISK MANAGEMENT

The following risk assessment applies to this report:

Risk Number Description

Non-compliance with State and Commonwealth legislation leading to Risk No. potential prosecution of Council, executive officer liability and negative CO000431 city image.

Risk No. Qualified audit leading to Council’s reputation being damaged. CO000433

Failure to achieve a sustainable long term financial position leading to Risk No. negative impacts on Council’s ability to deliver on its key focus area CO000435 commitments.

773rd Council Meeting 14 May 2019 48 Special Budget & Finance Committee Meeting 13 May 2019 Adopted Report

ITEM 3 (Continued) WASTE SERVICES MARCH 2019 BUDGET REVIEW FN334/252/19(P8)

9 STATUTORY MATTERS

The following State Government legislation has relevance to this report, with respect to the business activities and practices of the Waste Management Services commercial business unit:

. Local Government Act 2009 . Local Government Regulation 2012 . Waste Reduction and Recycling Act 2011 . Waste Reduction and Recycling Regulation 2011 . Queensland Competition Authority Act 1997.

10 COUNCIL POLICIES

The following Council policies are relevant to this report:

. City of Gold Coast Budget Review Policy . Debt Policy . Revenue Policy.

11 DELEGATIONS

Not Applicable.

12 COORDINATION & CONSULTATION

Title of the Stakeholder Directorate or Stakeholder Satisfaction Consulted Organisation With Content of Report and Recommendations (Yes/No)

Executive Coordinator Office of the Chief Executive Yes Directorate Finances Officer

13 STAKEHOLDER IMPACTS

Not Applicable.

14 TIMING

Not Applicable.

15 CONCLUSION

The City of Gold Coast Budget Review Policy requires that, except for items identified for corporate funding, each Directorate is to submit a balanced quarterly budget review. Budget movements contained in this report comply with this requirement.

773rd Council Meeting 14 May 2019 49 Special Budget & Finance Committee Meeting 13 May 2019 Adopted Report

ITEM 3 (Continued) WASTE SERVICES MARCH 2019 BUDGET REVIEW FN334/252/19(P8)

Following completion of Waste Services detailed quarterly review of capital and operating budgets (revenue and expense), movements have been recorded across several areas of the business. Budget movements for business unit activities have not required corporate funding.

Table 11 provides a summary of adjustments recorded at this Review:

Mar 19 Dec 18 2018-19 Mar v Dec Summary Income Statement Review Review Initial Movement Year Ended 30th June 2019 ($M) ($M) ($M) ($M) % Operating Revenue 109.7 107.7 108.1 2.0 1.9 Operating Expenses 75.1 75.0 73.2 0.1 0.1 Operating Result 34.6 32.7 34.9 1.9 5.8 Depreciation / Amortisation 8.6 8.6 8.6 - - Earnings Before Interest and Taxation 26.0 24.1 26.3 1.9 7.8 Interest Expense (QTC loan) 3.8 3.8 3.9 - - Interest Margin Expense 0.1 0.1 0.1 - - Income Tax Eqivalents 7.9 7.9 7.9 (0.0) (0.4) Net Profit After Taxation 14.2 12.4 14.4 1.9 15.6 Dividend 7.7 7.7 7.7 - - Retained Earnings 6.5 4.7 6.7 1.9 41.2

Capital Expenditure 8.5 10.6 12.7 (2.1) (20.1)

Total Capital Works Program Expenditure 8.5 10.6 12.7 (2.1) (20.1) Table 11: Summary of Budget Adjustments

The net result is a forecast return of $18.3 million (excluding SLA, Insurance Premiums and Fleet & Plant) to the City in 2018-19, as shown in Table 12.

Mar 19 Dec 18 2018-19 Mar v Dec Returns to Community Review Review Initial Movement Year Ended 30th June 2019 ($'000) ($'000) ($'000) ($'000) % Interest Margin Expense 0.1 0.1 0.1 - - Income Tax 7.9 7.9 7.9 (0.0) (0.0) Land Tax 2.5 2.5 2.5 - - Dividend 7.7 7.7 7.7 - - Returns to Community 18.2 18.2 18.2 (0.0) 0.0 (Exc SLA, Insurance Premiums and Fleet and Plant) SLA Costs 2.7 2.7 2.7 - - Fleet and Plant 10.2 9.5 9.0 0.7 7.4 Total Payments to Community 31.1 30.4 29.9 0.7 2.2

Table 12 –Returns to Community

773rd Council Meeting 14 May 2019 50 Special Budget & Finance Committee Meeting 13 May 2019 Adopted Report

ITEM 3 (Continued) WASTE SERVICES MARCH 2019 BUDGET REVIEW FN334/252/19(P8)

16 RECOMMENDATION

It is recommended that Council resolves as follows:

1 That Council approve the net increase of $2.5 million to be transferred to the Waste Management Reserve. 2 That Council note budget variations per Attachments 2 and 3 are included in the March 2019 Budget Review.

Author: Authorised by: Karen O’Brien Paul Heaton Manager Business Performance Director Water and Waste 29 March 2019 TRACKS REF: #73023190

COMMITTEE RECOMMENDATION SBF19.0513.003 moved Cr Tate seconded Cr Peter Young

1 That Council approve the net increase of $2.5 million to be transferred to the Waste Management Reserve. 2 That Council note budget variations per Attachments 2 and 3 are included in the March 2019 Budget Review.

CARRIED

773rd Council Meeting 14 May 2019 51 Special Budget & Finance Committee Meeting 13 May 2019 Adopted Report

ITEM 3 (Continued) WASTE SERVICES MARCH 2019 BUDGET REVIEW FN334/252/19(P8) Attachment 1.1

DETAILED INCOME STATEMENT (ACCRUAL) March 2019 Budget Review

Waste Services Mar 19 Dec 18 2018-19 Mar v Dec Financial Management Statement Review Review Initial Movement Year Ended 30th June 2019 ($'000's) ($'000's) ($'000's) Mvt % Mvt Operating Revenue Waste Utility Rate Revenue 83,990 83,990 83,990 0 0.0 Refuse Tipping Fees 7,235 8,290 8,290 (1,055) (12.7) Recycling Revenue 1,413 1,083 1,083 330 30.5 Fees & Charges 1,404 1,804 2,504 (400) (22.2) Internal Tipping Charges 10,324 7,824 7,824 2,500 32.0 Community Service Obligations 3,250 3,250 3,250 0 0.0 Interest on Outstanding Rates 275 150 150 125 83.3 Interest on Investments 970 970 630 0 0.0 Contributions & Donations Revenue 378 378 378 0 0.0 Other Operating Income 440 44 44 396 900.0 Total Operating Revenue 109,678 107,782 108,142 1,896 1.8 Operating Expenses Employee Expenses 9,576 9,684 8,860 109 1.1 Materials and Services 12,935 15,969 15,847 3,035 19.0 Council Corporate SLA 2,743 2,743 2,743 0 0.0 Internal Directorate SLA 3,332 3,332 3,332 0 0.0 Waste Collection Payments 28,521 27,561 27,561 (960) (3.5) Fleet and Plant 13,357 11,491 10,934 (1,866) (16.2) Consultants 1,858 1,533 1,200 (326) (21.2) Electricity 149 149 149 0 0.0 Insurance Premiums 85 85 85 0 0.0 Other Expenditure 2,500 2,500 2,500 0 0.0 Landfill Remediation Costs Total Operating Expenses 75,054 75,046 73,211 (8) (0.0) Total Operating Profit 34,624 32,736 34,931 1,888 5.8

Depreciation / Amortisation 8,600 8,600 8,600 0 0.0

EBIT 26,024 24,136 26,331 1,888 7.8 Interest Expense (QTC loan) 3,790 3,790 3,945 0 0.0 Interest Margin Expense 152 152 152 0 0.0 Income Tax Equivalents 7,909 7,943 7,942 34 0.4 NPAT 14,173 12,252 14,292 1,922 15.7

Dividend 7,691 7,691 7,691 0 0.0

Retained Earnings 6,482 4,561 6,601 1,922 42.1

773rd Council Meeting 14 May 2019 52 Special Budget & Finance Committee Meeting 13 May 2019 Adopted Report

ITEM 3 (Continued) WASTE SERVICES MARCH 2019 BUDGET REVIEW FN334/252/19(P8) Attachment 1.2 DETAILED INCOME STATEMENT (CASH) March 2019 Budget Review Waste Services Mar 19 Dec 18 2018-19 Mar v Dec Financial Management Statement Review Review Initial Movement {Cash} Year Ended 30th June 2019 ($'000's) ($'000's) ($'000's) Mvt % Mvt Operating Revenue Waste Utility Rate Revenue 83,990 83,990 83,990 0 0.0 Refuse Tipping Fees 7,235 8,290 8,290 (1,055) (12.7) Recycling Revenue 1,413 1,083 1,083 330 30.5 Fees & Charges 1,404 1,804 2,504 (400) (22.2) Internal Tipping Charges 10,324 7,824 7,824 2,500 32.0 Community Service Obligations 3,250 3,250 3,250 0 0.0 Interest on Outstanding Rates 275 150 150 125 83.3 Interest on Investments 970 970 630 0 0.0 Contributions & Donations Revenue 378 378 378 0 0.0 Other Operating Income 440 44 44 396 900.0 Total Operating Revenue 109,678 107,782 108,142 1,896 1.8 Operating Expenses Employee Expenses 9,576 9,684 8,860 109 1.1 Materials and Services 12,935 15,969 15,847 3,035 19.0 Council Corporate SLA 2,743 2,743 2,743 0 0.0 Internal Directorate SLA 3,332 3,332 3,332 0 0.0 Waste Collection Payments 28,521 27,561 27,561 (960) (3.5) Fleet and Plant 13,357 11,491 10,934 (1,866) (16.2) Consultants 1,858 1,533 1,200 (326) (21.2) Electricity 149 149 149 0 0.0 Insurance Premiums 85 85 85 0 0.0 Other Expenditure 2,500 2,500 2,500 0 0.0 Total Operating Expenses 75,054 75,046 73,211 (8) (0.0)

Total Operating Profit 34,624 32,736 34,931 1,888 5.8 Gain/Loss on Sale of Assets 0 0 0 0 0.0 Depreciation / Amortisation 0 0 0 0 0.0 EBIT 34,624 32,736 34,931 1,888 5.8 Interest Expense (QTC loan) 3,790 3,790 3,945 0 0.0 Interest Margin Expense 152 152 152 0 0.0 Income Tax Equivalents 7,909 7,943 7,942 34 0.4 NPAT 22,773 20,852 22,892 1,922 9.2

Dividend 7,691 7,691 7,691 0 0.0 Debt Redemption 7,655 7,655 7,827 0 0.0 Capital Expenditure 8,453 10,575 12,725 2,122 20.1 Loan Funding (3,340) (4,880) (5,600) (1,540) 31.6 Transfer To/(From) Reserves 2,315 (189) 249 2,504 (1,321.7)

773rd Council Meeting 14 May 2019 53 Special Budget & Finance Committee Meeting 13 May 2019 Adopted Report

ITEM 3 (Continued) WASTE SERVICES MARCH 2019 BUDGET REVIEW FN334/252/19(P8) Attachment 2

GOLD COAST WASTE MANAGEMENT – MARCH 2019 BUDGET REVIEW BUDGET CENTRE MOVEMENTS

2018-19 2018-19 2018-19 2018-19 2018-19 March December March March March Review Budget Centre Review Review Review Review Non- Total Recurrent Total Total Recurrent Budget Movement Movement Budget Movement CS4700O003 - WD - Administration 477,020 0 170,000 170,000 647,020 CS4700O005 - WD - Landfill Operations (15,695,578) 1,165,000 (2,732,070) (1,567,070) (17,262,648) CS4700O018 - WD - Cost Centre Plant 108,500 0 110,000 110,000 218,500 CS4710O001 - WC - Administration 18,186,350 0 400,000 400,000 18,586,350 CS4710O003 - WC - Recycling Service Contracts 9,256,400 360,000 0 360,000 9,616,400 CS4710O004 - WC - Waste Service Contracts 16,579,900 600,000 0 600,000 17,179,900 CS4710O005 - WC - Stradbroke Island Waste Disposal 459,800 0 0 0 459,800 CS4710O006 - WC - Wheelie Bins 2,509,100 0 (800,000) (800,000) 1,709,100 CS4710O010 - WC - Cost Centre Plant 23,800 0 0 0 23,800 CS4740D001 - WM - Debt Servicing Garbage Disposal 11,444,663 0 0 0 11,444,663 CS4740N002 - WM - Comp Neutrality – Int Margin Loans 152,000 0 0 0 152,000 CS4740N003 - WM - Income Tax Equivalent - Waste 10,442,439 0 (33,568) (33,568) 10,408,871 CS4740N004 - WM - Dividend – Waste 7,691,121 0 0 0 7,691,121 CS4740N006 - WM - CSO Remission - Waste (3,249,876) 0 0 0 (3,249,876) CS4740O001 - WM - Refuse Charge Donations 559,000 0 0 0 559,000 CS4740O002 - WM - Refuse Charge (84,140,000) 0 (125,000) (125,000) (84,265,000) CS4740O003 - WM - Reserve Transfers - Waste 9,354,886 0 1,671,638 1,671,638 11,026,524 CS4740O004 - WM - Annual Community Grants 485,100 0 0 0 485,100 CS4740O007 - WM - Accumulated Surplus Brought Forward (3,599,125) 0 0 0 (3,599,125) CS4740O008 - WM - Branch Management 366,270 0 260,000 260,000 626,270 CS4740S001 - WM - SLA Org Services to Waste Mgmt 2,409,079 0 0 0 2,409,079 CS4740S002 - WM - SLA OCOO to Waste Mgmt 333,847 0 0 0 333,847 GW1100O001 - WRC - Management 8,334,052 (370,000) (500,000) (870,000) 7,464,052 GW1100O002 - WRC - Helensvale Waste & Recycling Centr 920,462 0 0 0 920,462 GW1100O003 - WRC - Molendinar Waste & Recycling Centr 1,163,464 0 105,000 105,000 1,268,464 GW1100O004 - WRC - Merrimac Waste & Recycling Centre 628,322 (200,000) 0 (200,000) 428,322 GW1100O005 - WRC - Reedy Creek Waste & Recycling Cent 830,854 0 245,000 245,000 1,075,854 GW1100O006 - WRC - Currumbin Waste & Recycling Centre 83,046 0 0 0 83,046 GW1100O007 - WRC - Jacobs Well Waste & Recycling Cent 170,422 0 0 0 170,422 GW1100O008 - WRC - Mudgeeraba Waste & Recycling Centr 191,456 0 0 0 191,456 GW1100O009 - WRC - Minor Waste & Recycling Centre 246,500 (230,000) 0 (230,000) 16,500 GW1100O010 - WRC - Resource Recovery 1,300 0 (330,000) (330,000) (328,700) GW1100O012 - WRC - Coomera Waste & Recycling Centre 0 230,000 0 230,000 230,000 GW1120O001 - SWS - Solid Waste Strategy 903,825 0 4,000 4,000 907,825 GW1120O002 - SWS - Recycling Promotion & Resources (74,805) 0 0 0 (74,805) GW4740O009 - WM - Administration 2,446,406 0 0 0 2,446,406 TOTAL 0 1,555,000 (1,555,000) 0 0

773rd Council Meeting 14 May 2019 54 Special Budget & Finance Committee Meeting 13 May 2019 Adopted Report

ITEM 3 (Continued) WASTE SERVICES MARCH 2019 BUDGET REVIEW FN334/252/19(P8) Attachment 3

WASTE SERVICES CAPITAL PROGRAM MOVEMENT MARCH 2019 BUDGET REVIEW

2018-19 MAR 2018-19 2018-19 2018-19 REVIEW 2018-19 SEP DEC M AR MOVEMENT PROJECT DESCRIPTION INITIAL BUDGET FORECAST FORECAST FORECAST ($) Reedy Creek Landfill Cells 3 and 4 4,880,000 4,880,000 4,880,000 2,950,000 (1,930,000)

Stapylton Landfill Main Access Upgrade 2,000,000 2,000,000 2,000,000 2,000,000 0

WRC Minor Renewals 2018-19 470,000 470,000 470,000 775,000 305,000

Recycle Street and Wayfinding 2018-19 250,000 250,000 250,000 684,000 434,000

Landfill Minor Renewals 2018-19 510,000 467,000 467,000 467,000 (0)

Coomera WRC Stage 1 - - - 390,000 390,000

Merrimac Green Waste Pad - 800,000 800,000 380,000 (420,000)

WRC Weighbridge and Security Upgrade 200,000 200,000 200,000 200,000 0

WRC Bin Bay Upgrades 1,000,000 300,000 300,000 160,000 (140,000)

Stapylton Landfill Sediment Basin - 300,000 300,000 150,000 (150,000)

WRC Minor Renewals 2017-18 - 44,000 44,000 90,000 46,000

Reedy Creek Landfill Sewer Connection 80,000 30,000 30,000 89,000 59,000

SCADA Installation 685,300 685,300 685,300 45,000 (640,300)

Landfill Minor Renewals 2017-18 - 49,000 49,000 35,500 (13,500)

Stapylton Landfill Site Improvements - - - 17,000 17,000

Reedy Creek Landfill Site Improvements - - - 12,500 12,500

Construct Reedy Creek Site Office 100,000 100,000 100,000 8,000 (92,000)

Stapylton Landfill Cell 7 520,000 520,000 - - 0

Stapylton Landfill Internal Road Upgrade 300,000 200,000 - - 0

Reedy Creek Landfill Internal Rd Upgr 250,000 150,000 - - 0

Reedy Creek Landfill Stormwater Entrance 250,000 150,000 - - 0

Stapylton Sediment and Erosion Control 200,000 100,000 - - 0

Coomera WRC D&C Stage 2 200,000 200,000 - - 0

RORO Bins 2018-19 330,000 330,000 - - 0

WRC Compaction Plant 18-19 500,000 500,000 - - 0 $ 12,725,300 $ 12,725,300 $ 10,575,300 $ 8,453,000 ($2,122,300)

(Note: Capital decrease in the March 2019 Budget Review is offset by reductions in loan borrowings and reserve transfers, so net impact to the budget is nil.)

773rd Council Meeting 14 May 2019 55 Special Budget & Finance Committee Meeting 13 May 2019 Adopted Report

ITEM 3 (Continued) WASTE SERVICES MARCH 2019 BUDGET REVIEW FN334/252/19(P8) Attachment 4

WASTE SERVICES OPERATIONAL PROGRAM MOVEMENT MARCH 2019 BUDGET REVIEW

2018-19 2018-19 2018-19 2018-19 MAR 2018-19 PROJECT DESCRIPTION SEP DEC MAR REVIEW INITIAL BUDGET FORECAST FORECAST FORECAST MOVEMENT Waste Facility Environmental Audits - 160,000 160,000 250,500 90,500 Review landfill site operational plans 150,000 218,000 218,000 59,000 (159,000) Landfill Gas Monitoring Network Augmentation - 34,000 34,000 36,000 2,000 Condition Assessments Landfills 2018-19 47,500 47,500 47,500 - (47,500) Total for budget centre CS4700O005 197,500 459,500 459,500 345,500 (114,000) Capping of Molendinar Landfill 250,000 250,000 250,000 - (250,000) Total for budget centre CS4700O016 250,000 250,000 250,000 - (250,000) Review of Operational Plans at WRC's 200,000 110,000 150,000 242,500 92,500 Review of Local Law 20 and Waste Disposal Fee Concession Policy - 100,000 100,000 107,000 7,000 Condition Assessments at WRC's 2018-19 34,500 34,500 34,500 35,000 500 Condition Assessment/Inspection at WRC's - - 19,500 19,500 0 Total for budget centre GW110O001 234,500 244,500 304,000 404,000 100,000 Commercial Food Waste Service 150,000 150,000 150,000 198,000 48,000 Solid Waste Stream Audit (Assessment) 2018-19 90,000 140,000 140,000 196,000 56,000 Waste and Recycling Centres Improvement - signage and visual landscaping - 62,000 62,000 112,000 50,000 Assessment of Organic Waste Programmes - 50,000 50,000 80,000 30,000 Total for budget centre GW1120O001 240,000 402,000 402,000 586,000 184,000 Waste Collections Contract and Controlled Waste Collection Areas Review 300,000 175,000 175,000 - (175,000) Total for budget centre GW1120O002 300,000 175,000 175,000 - (175,000) $ 1,222,000 $ 1,531,000 $ 1,590,500 $ 1,335,500 ($255,000)

773rd Council Meeting 14 May 2019 56 Special Budget & Finance Committee Meeting 13 May 2019 Adopted Report

ITEM 4 LIFESTYLE & COMMUNITY TOURIST PARKS MARCH 2019 BUDGET REVIEW FN334/375/20(P1) Refer to 8 page attachment

1 BASIS FOR CONFIDENTIALITY

Not Applicable.

2 EXECUTIVE SUMMARY

Not Applicable.

3 PURPOSE OF REPORT

The purpose of this report is to provide an overview of budget adjustments proposed by Gold Coast Tourist Parks (‘Tourist Parks’) at the March 2019 Budget Review.

4 PREVIOUS RESOLUTIONS

Not Applicable.

5 DISCUSSION

5.1 Introduction

The Gold Coast Tourist Parks is a commercial business unit of the City and sits under the Community Venues and Services Branch of the Lifestyle and Communities directorate.

The commercial operations of the Gold Coast Tourist Parks includes a portfolio of seven mainland tourist parks for the purpose of attracting visitors to the city, for recreation and camping.

The Tourist Parks offer a variety of accommodation options including villas, studios, lodgings, powered van sites and unpowered camping sites. The Gold Coast Tourist Parks welcomes 130,000 guests per year and generates over $17.75 million in revenue. This translates to $84 million in local economic benefit (refer Attachment 1).

The Gold Coast Tourist Parks is a revenue positive business and does not rely on any subsidy from the City. As a result of the revenue earnings, the Tourist Parks business is able to positively contribute a $5.2 million per annum financial return to the City which, in part, underpins the Major Events budget and aims to attract new visitation to the City.

5.2 Performance Review

The Australian domestic caravan and camping industry has experienced unprecedented growth over recent years.

For the year ending September 2018, the total number of nights spent caravan and camping in the domestic market increased by 9 per cent from the prior year to a record 54.8 million, representing 15 per cent of all nights spent in accommodation across Australia. Whilst growth has occurred in all states and territories, Queensland has enjoyed the most significant increase of 23 per cent in nights and 12.4 per cent in visitors.

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ITEM 4 (Continued) TOURIST PARKS MARCH 2019 BUDGET REVIEW FN334/375/20(P1)

In addition, record amounts of international visitors are choosing to caravan and camp in Australia. Data shows that in the year ending June 2018, 381,888 visitors chose to caravan and camp, spending 4.87 million nights around Australia, with shorter trips to Australia also remaining a trend.

Caravan and camping visitors from the Netherlands increased by 42.8 per cent while China grew by 21 per cent and French visitors increased by 7 per cent.

The modern traveller to Australia is seeking an independent trip with ‘special moments’ that are based around uniqueness, authenticity and the quintessential Australian outdoor lifestyle, which is the tradition of caravan and camping holidays.

With the boom in the industry, there has been an increase in redevelopment and investment to existing caravan parks. Private owners, Councils and State Governments across Australia recognise the environmental, social and economic value of the caravan and camping industry and are looking to find new ways to support the growth in the market and attract visitors to their parks, towns and States. Close to home, northern New South Wales has begun significant investment in numerous parks including the $20 million+ redevelopment of the Kingscliff Foreshore and the Kingscliff Beach Holiday Park.

The market growth and increased investment across the industry has raised competition within the market, which in turn has raised guest expectations around value for money, quality and experiential holidays.

In recognition of the change in guest expectations, the Gold Coast Tourist Parks team brought a new strategy to Council in 2018 specifying the need to focus on achieving world- class facilities and a world-class guest experience.

The Tourist Parks team have been working toward the achievement of this goal through a number of actions including:

• development of a new Guest Experience Standard; • development of presentation, cleaning, landscaping and maintenance standards; • investing in a revenue management and pricing expert to assist with strategies to ensure continued growth; • site audits and planning for future investment; • undertaking detailed asset condition assessments to assist with lifecycle management and planning; • development of new Planned Maintenance Schedules; and • significant revision of contractual requirements for park managers with tenders for new park Contractors to commence October 2019.

The Gold Coast Tourist Parks has seen a small year on year actual revenue and visitation growth across the group. In the year to 31 March 2019, the group generated a total tariff increase of $144,000 from the same period for the prior year. This was a result of the 1.1 per cent growth in occupancy across the group, which equates to an additional 2986 site nights. Given the significant increase in market competition, this is a favourable result.

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ITEM 4 (Continued) TOURIST PARKS MARCH 2019 BUDGET REVIEW FN334/375/20(P1)

Ocean Beach and Tallebudgera Tourist Parks enjoyed the highest occupancy growth of the seven parks, with 3.06 per cent and 4.45 per cent respectively. Both parks have the potential to surpass revenue budgets however forecast revenue movements have not been declared in the March 2019 Budget Review as there are still three large seasons to follow, of which the forecast revenues must yet materialise. It is anticipated that any surplus resulting from this will be adjusted at end of financial year. Kirra Beach and Jacobs Well had a marginal increase in occupancy while Broadwater, Main Beach and Burleigh Beach have had a small reduction in occupancy.

The reduction in occupancy at Broadwater, Main Beach and Burleigh Beach is largely attributed to a lower than forecast September school holidays. The lower occupancy equated to a total forecast variance of $134,035 in sites and $50,784 in villas across all these parks.

During periods of high market competition it is imperative to identify and act upon opportunities for increased occupancy. As such, a change to the December/January school holidays,Christmas season peak and shoulder seasons were tested after market sounding and guest feedback suggested that there would be higher demand for villas during the first week of the school holidays and higher demand for sites in the last week of the school holidays.

The Christmas peak season for both villas and sites was delayed by a week, reducing the peak season days from 30 to 23 and increasing the post-Christmas peak season for sites from seven days to 12 days (plus three days for the Australia Day long weekend). Across both seasons and both categories (villas and sites) there was a significant increase in occupancy figures as compared to the prior year but an overall reduction in budgeted revenues due to the reduction in peak season tariff days.

To reflect the changes due to the September and December school holiday seasons, a correlating downward revenue budget adjustment is proposed for the March 2019 Budget Review. This budget adjustment is made up of $138,899 for Main Beach Tourist Park and $259,020 for Broadwater Tourist Park.

All other parks are forecast to meet revenue targets and any further revenue movements will be adjusted at the end of the financial year.

As outlined above, to ensure that the Tourist Parks continue to meet guest expectations and enjoy strong revenues and occupancy, a series of activities are currently being undertaken by the Tourist Parks team to appropriately plan and manage the assets of the Tourist Parks.

A new suite of park management contracts, site plans, detailed asset condition assessments and maintenance plans has required additional expenditure during the current 2018-19 financial year which are proposed for the March 2019 Budget Review. A non-recurrent expenditure budget increase of $330,890 is required to support increased maintenance activity. Future recurrent requirements for increases in operational expenditure to meet the higher level of Tourist Park presentation has been included in the 10 year Service Financial Forecast for all future years.

773rd Council Meeting 14 May 2019 59 Special Budget & Finance Committee Meeting 13 May 2019 Adopted Report

ITEM 4 (Continued) TOURIST PARKS MARCH 2019 BUDGET REVIEW FN334/375/20(P1)

5.3 Budget Adjustment Summary

Tourist Parks’ proposed budget adjustments for the March 2019 Budget Review are set out in Table 1 below. These items are explained in detail in the following sections.

Summary Income Statement Mar 19 Dec 18 Mar v For the period ended 30 June 2019 Review Review Dec Mvt ($m) ($m) ($m) % Mvt Operating Revenue 17.75 18.14 (0.40) (2.2) Operating Expenses 11.38 11.05 (0.33) (3.0) Net Profit before Capital Items $ 6.37 $ 7.10 ($ 0.73) (10.1) Capital Revenue 0.00 0.00 0.00 0.0 Depreciation / Amortisation 1.65 1.65 0.00 0.0 Earnings Before Interest and Taxation $ 4.72 $ 5.45 ($ 0.73) (13.0) Interest Expense (QTC loan) 0.31 0.31 0.00 0.0 Interest Margin Expense 0.02 0.02 0.00 0.0 Income Tax Equivalents 1.42 1.68 (0.26) (15.2) Net Profit After Taxation $ 2.97 $ 3.44 ($ 0.47) (13.5)

Capital Expenditure 3.73 4.77 (1.05) (23.0) Total Capital Works Program Expenditure $ 3.73 $ 4.77 $ 0.00 0.0 Table 1: Summary of Budget Adjustments – Tourist Parks – March 2019 Budget Review

5.4 Operating Revenue

The 2018-19 revenue budget has been adjusted down by $397,920 representing 2.2 per cent of the $18.14 million budget.

The 2018-19 initial revenue budget forecast, set in November 2017, did not take into account the increased competition within the market that has seen a lower than forecast September school holiday season or the amendments to the Christmas season. Whilst the majority of parks are forecast to meet revenue targets due to overall growth in occupancy, Broadwater and Main Beach Tourist Parks require a downward revenue correction of 5.8 per cent and 5.1 per cent respectively. The 2018-19 forecast revenue for both parks however exceeds the actual revenue achieved in the 2017-18 financial year (adjusted for the impacts of GC2018) and continues to hold strong revenue of $6.7 million between the two parks.

The overall revenues and occupancy for the Gold Coast Tourist Parks group remains strong. With increased focus on the pricing and revenue management strategies, investment in improving stock, facilities and the customer experience, the group will continue to earn excellent revenues.

773rd Council Meeting 14 May 2019 60 Special Budget & Finance Committee Meeting 13 May 2019 Adopted Report

ITEM 4 (Continued) TOURIST PARKS MARCH 2019 BUDGET REVIEW FN334/375/20(P1)

Operating Revenue Mar 19 Dec 18 Mar v For the period ended 30 June 2019 Review Review Dec Mvt ($m) ($m) ($m) % Mvt Rates and Utility Charges 0.0 0.0 0.0 0.0 Fees & Charges 17.74 18.11 (0.39) (2.2) Community Service Obligations 0.00 0.00 0.00 0.0 Interest on Outstanding Rates 0.00 0.00 0.00 0.0 Contributions & Donations Revenue 0.00 0.00 0.00 0.0 Other Operating Income 0.01 0.02 (0.01) (59.0) Total Operating Revenue 17.75 18.14 (0.40) (2.2) Table 2 – Budget adjustments in Tourist Parks Operating Revenue – March 2019 Budget Review

5.5 Operating Expenditure The 2018-19 expenditure budget has been adjusted by $330,890 representing 10.7 per cent of the $3.10 million budget for materials and services.

The 2018-19 initial expenditure budget, set in November 2017, did not take into account the increased focus on lifting the presentation of the current assets to meet guest expectations and increased maturity in asset management and planning.

$240,890 additional expenditure budget is required to offset increased planned and reactive maintenance costs at Tallebudgera Creek and Broadwater Tourist Parks. This includes $60,560 at these two parks for the Level 1 & 2 Electrical testing which was deemed urgent due to a number of electrical faults.

$90,000 additional expenditure budget is attributed directly to external consultants and engineers engaged to assist with the future planning activities such as the asset condition audit.

Maintenance and services expenditure, for the Gold Coast Tourist Parks group will continue to increase in the next two to three years until current lifecycle asset planning and new investment replaces old stock with new, and planned maintenance schedules convert high reactive maintenance expenditure to known, planned expenditure. This should reduce maintenance costs over time.

Operating Expenses Mar 19 Dec 18 Mar v For the period ended 30 June 2019 Review Review Dec Mvt ($m) ($m) ($m) % Mvt Employee Expenses 0.74 0.74 0.00 0.0 Materials and Services 3.43 3.10 (0.33) (10.7) Council Corporate SLA 0.55 0.55 0.00 0.0 Commission Costs 2.82 2.82 0.00 0.0 Property Managers 0.85 0.85 0.00 0.0 Internal Rate Charges 1.91 1.91 0.00 0.0 Other Expenditure 1.09 1.09 0.00 0.0 Total Operating Expenses 11.38 11.05 (0.33) (3.0) Table 3 - Budget adjustments in Tourist Parks Operating Expenses – March 2019 Budget Review

773rd Council Meeting 14 May 2019 61 Special Budget & Finance Committee Meeting 13 May 2019 Adopted Report

ITEM 4 (Continued) TOURIST PARKS MARCH 2019 BUDGET REVIEW FN334/375/20(P1)

5.6 Income Tax Equivalents

The reduction in revenue and increase in expenditure has resulted in a lower than initially budgeted net profit. As such, downward correction of $255,127 is required to the income tax equivalent payment to Council now $1.41 million from $1.68 million.

5.7 Capital Works Program Budget Adjustments

Due to the changes in guest expectations, changes to revenue management and pricing, the increased focus on asset lifecycle management and the future investment planning, a significant number of capital projects approved for delivery in 2018-19 have been set aside to ensure that any capital investment, whether new or renewal is aligned to the long term strategy. An increase of $350,000 for the Kirra Beach Tourist Park Manufactured Homes Acquisition Program is required to fund one Special Circumstances application, of which the merits have been proven and cannot be reasonably withheld under the current direction of Council. Refer to Attachment 3 for a detailed listing of the 2018-19 Tourist Parks Capital Program. Table 4 below shows the significant capital works budget movements included in the March 2019 budget review.

Mar v Mar 19 Dec 18 Dec Review Project Review ($) Mvt ($) % Mvt Number Project Description ($) 30920 Asset Disability Access TP 0 273,187 (273,187) -100.0% 31380 Tallebudgera Ck. TP Asset Renewal 0 200,000 (200,000) -100.0% 31391 Tallebudgera TP Water Play Acquisition 0 40,000 (40,000) -100.0% 31952 Talleb. Creek TP ReFitout 6th Ave Ame 0 100,000 (100,000) -100.0% 32011 Tallebudgera Ck.TP Electrical DSB 65,000 0 65,000 0.0% 31943 Main Beach Amenity Block Major Reno 773,190 500,000 273,190 54.6% 30938 Broadwater TP Infrastructure Renewal 0 193,791 (193,791) -100.0% 31385 Broadwater TP Asset Renewal 160,000 200,908 (40,908) -20.4% 31390 Broadwater TP Safari Tents 0 150,000 (150,000) -100.0% Broadwater TP Replace 3 Waterfront 31946 Villa 200,000 540,000 (340,000) -63.0% 31948 Broadwater TP Re-Fitout South. Amen 0 60,000 (60,000) -100.0% 32058 Broadwater T Park-Ext .Villa Painting 210,000 0 210,000 0.0% 31384 Jacobs Well TP Asset Renewal Prog 0 107,703 (107,703) -100.0% 31395 Jacobs Well TP Safari Tents Acquisition 165,293 104,683 60,610 57.9% 31529 Jacobs Well TP Villa Repairs 267,703 51,970 215,733 415.1% 32059 Jacobs Well TP Camp Kitchen Renewal 50,000 0 50,000 0.0% 31394 Kirra Beach TP Pre-Fab Amenity Block 0 150,000 (150,000) -100.0% 31950 KBTP Re-Fitout Amenities block 0 50,000 (50,000) -100.0% 31970 Kirra Beach TP Acquisitions 1,115,000 765,000 350,000 45.8% 31982 Kirra Beach TP Dog Wash Area 57,380 10,000 47,380 473.8% 31381 Ocean Beach TP Asset Renewal Prog 0 73,578 (73,578) -100.0% 31386 Burleigh Beach TP Asset Renewal Prog 0 154,534 (154,534) -100.0% 31387 Burleigh Beach TP Villa Replacement 180,000 480,000 (300,000) -62.5% Table 4 – Significant Movement project budget movements - March 2019 Budget Review

773rd Council Meeting 14 May 2019 62 Special Budget & Finance Committee Meeting 13 May 2019 Adopted Report

ITEM 4 (Continued) TOURIST PARKS MARCH 2019 BUDGET REVIEW FN334/375/20(P1)

Project Number Project Description Status Explanation 30920 Asset Disability Assigned This funding will be assigned to the new Main Beach Tourist Park Amenities Access TP to 31943 project to improve accessibility. 32011 Tallebudgera New Funds are required for electrical distribution upgrade across the Park to Ck.TP Electrical project mitigate ongoing electrical outages during peak periods and capacity for DSB future improvements to infrastructure. 31943 Main Beach Scope Change in purpose - Renewal to New/Upgrade - The cost estimate to Amenity Block addition complete the Main Beach Amenity Block Major Renovation project was in Major Reno. excess of $500,000. As the current block is well aged and in a prime site location, a new amenity block can be built in a currently unused area of the park which can provide space for increased revenue returns (new sites), superior facilities and significantly improved disability access. The current location does not allow for safe disability access and is very difficult to navigate. This project is due to go to market for tender in June 2019. 31946 Broadwater TP Scope The original estimate of $540,000 for this project was based on the full Replace 3 reduction replacement of three deluxe Villas. Upon inspection from the structural Waterfront V engineer, it was determined that the structure of the Villas is sound and as such, it is appropriate to refurbish the Villas rather than replace at this time, which will ensure that the full yield anticipated from the villas is received in in their lifetime. These older, but renovated, villas can then be moved to an alternate location in the future. The refurbishment of the Villas is estimated at $65k each including improved decks, flooring, kitchen, bathroom, bedroom as well as FFE. 32058 Broadwater T New A new renewal project has been identified to be undertaken in the current Park-Ext .Villa project financial year. 25 Villas at the Broadwater Tourist Park are in need of Painting external paint to prolong the life of the structure. This project is due to be completed June 2019. 31395 Jacobs Well TP Revised Additional funds required for the increased scope to include pathways, Safari Tents project electrical, drainage, turfing/landscaping and furniture and fixtures. This Acquisition estimate project is complete. 31529 Jacobs Well TP Scope A new renewal project has been identified to be undertaken in the current Villa Re addition financial year. A full refurbishment of the Villas rather than replace at this time, which will ensure that the full yield anticipated from the villas is received in in their lifetime. The refurbishment of the Villas is estimated at $65k each including improved decks, flooring, kitchen, bathroom, bedroom as well as FFE. 32059 Jacobs Well TP New Renewal project has been identified to be undertaken in the current financial Camp Kitchen project year. The renewed facilities will better meet guest expectations including a Renewal new double bbq, sink, electrical improvements and flooring treatment. This project is due to go to market for quote in June 2019. 31970 Kirra Beach TP Additional funds required for a Special Circumstances application. Acquisitions 31982 Kirra Beach TP Revised Additional funds required for increased scope to include water bubblers, Dog Wash Area project turfing and EHO requirements for drainage and roof covering. The dog wash estimate facility has attracted the attention of the national caravan and camping body who will be promoting it across their national publications in 2019. This project is complete.

773rd Council Meeting 14 May 2019 63 Special Budget & Finance Committee Meeting 13 May 2019 Adopted Report

ITEM 4 (Continued) TOURIST PARKS MARCH 2019 BUDGET REVIEW FN334/375/20(P1)

Project Number Project Description Status Explanation 31387 Burleigh Beach Scope The original estimate of $480,000 for this Project was based on the full TP Villa reduction replacement of three Villas. Upon inspection from the structural engineer, it Replacement was determined that the structure of the Villas is sound and as such, it is appropriate to refurbish the Villas rather than replace them which will ensure that the full yield anticipated from the Villas is received in in their lifetime. These older, but renovated, villas can then be moved to an alternate location in the future. The refurbishment of the villas is estimated at $60k each including decks, flooring, kitchen, bathroom, bedroom as well as FFE. 31380 Tallebudgera Project no

Ck. TP Asset longer These projects have been removed from the current program. Renewal required

31391 Tallebudgera Project no The 2018-19 Capital budget was prepared in late 2017 ahead of the Council TP Water Play longer Acquisition endorsement of the Gold Coast Tourist Parks vision and strategy. Objective required 1 of the Strategy outlines the need for significant improvement and 31952 Talleb. Creek Project no redevelopment of the current aged facilities to ensure they are befitting of the TP ReFitout 6th longer Ave Ame caravan and camping industry which is a $19 billion industry and has grown required year on year for the past 6 years. 30938 Broadwater TP Project no Infrastructure longer A new Infrastructure Investment Plan is currently being developed and all Renewal required current renewal work has been assessed on a case by case basis to ensure 31385 Broadwater TP Scope that funds are not expended on facilities that will be upgraded or replaced in Asset Renewal reduction the Investment Plan. As such, these projects have been removed from the 31390 Broadwater TP Project no current program to ensure that future funds and opportunity are available for Safari Tents longer the Investment Plan. required 31948 Broadwater TP Project no The requirement to draw down on loan funds can be reduced and therefore Re-Fitout longer present a savings to future debt and redemption payments until such works South. Amen B required are determined with an appropriate return on investment based investment 31384 Jacobs Well TP Project no program. Asset Renewal longer Prog. required 31394 Kirra Beach TP Project no Pre-Fab longer Amenity Block required 31950 KBTP Re-Fitout Project no Amenities block longer required 31381 Ocean Beach Project no TP Asset longer Renewal Prog required 31386 Burleigh Beach Project no TP Asset longer Renewal Prog. required Table 5 – Explanation of Significant Project Movement- March 2019 Budget Review

773rd Council Meeting 14 May 2019 64 Special Budget & Finance Committee Meeting 13 May 2019 Adopted Report

ITEM 4 (Continued) TOURIST PARKS MARCH 2019 BUDGET REVIEW FN334/375/20(P1)

5.8 Distribution of Earnings before Interest and Tax (EBIT)

Following the adjustments outlined in this report, the Gold Coast Tourist Parks 2018-19 Earnings before Interest and Tax (EBIT), on a cash basis, is estimated at $6.37 million (operating revenue of $17.75 million less operating expenditure of $11.38 million).

Distribution of Earnings Mar 19 Dec 18 Mar v For the period ended 30 June 2019 Review Review Dec Mvt ($m) ($m) ($m) % Mvt Interest Expense (External) 0.31 0.31 0.00 0.0 Principal Repayment (External) 2.16 2.16 0.00 0.0 Debt Service Payment 2.47 2.47 0.00 0.0 Capital Expenditure 3.73 4.77 1.05 21.9 Loan Funding (1.05) (2.45) (1.40) 57.0 Capital Expenditure 2.68 2.33 (0.35) (15.0) Tax Equivalents (30% taxable earnings) 1.42 1.68 0.26 15.2 Dividend 2.42 2.21 (0.21) (9.6) Interest Expense Margin 0.02 0.02 0.00 0.0 Payments to Council (Excluding SLA, Fleet & Plant and Land 3.86 3.91 0.04 1.1 Tax*) Retained Earnings for future TP Capital Works Investment (1.68) (0.65) 1.03 (159.3) Total Transfers to/(from) Reserve (1.68) (0.65) (0.24) 36.2 Prior Year Reprovision (0.96) (0.96) 0.00 0.0 Total Distribution 6.37 7.10 0.73 10.3 Table 6 – Distribution of Earnings * SLA, Fleet & Plant and Land Tax payments are further payments to Council which are recorded within Tourist Parks Operating Expenses and are therefore not reported as part of the Distribution of Earnings.

5.9 Returns to Community

Gold Coast Tourist Parks is expected to operate as a commercial business enterprise and provide an appropriate return to the community, based on the community’s investment in the business.

Due to the adjustment to net profit outlined above for the March 2019 Budget Review, the total return to the community (including SLA, Insurance Premiums and Fleet & Plant) will be adjusted from $5.31 million to $5.26 million.

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ITEM 4 (Continued) TOURIST PARKS MARCH 2019 BUDGET REVIEW FN334/375/20(P1)

Returns to Community Mar 19 Dec 18 Mar v For the period ended 30 June 2019 Review Review Dec Mvt ($m) ($m) ($m) % Mvt Interest Margin Expense 0.02 0.02 0.00 0.0 Income Tax 1.42 1.68 0.26 15.5 Land Tax 0.00 0.00 0.00 0.0 Dividend 2.42 2.21 (0.21) (9.5) Returns to Community (Excl SLA, Insurance Premiums and Fleet $ 3.86 $ 3.91 $ 0.05 1.3 & Plant) SLA Costs 0.55 0.55 0.00 0.0 Fleet & Plant 0.85 0.85 0.00 0.0 Total Payments to Community $ 5.26 $ 5.31 $ 0.05 0.9 Table 7 – Tourist Parks Returns to Community 6 ALIGNMENT TO THE CORPORATE PLAN, CORPORATE STRATEGIES AND OPERATIONAL PLAN

Not Applicable.

7 FUNDING AND RESOURCING REQUIREMENTS

Not Applicable.

8 RISK MANAGEMENT

The following risk assessment applies to this report:

Risk Number Description

Risk No. CO000431 Non-compliance with State and Commonwealth legislation leading to potential prosecution of Council, executive officer liability and negative city image.

Risk No. CO000433 Qualified audit leading to Council’s reputation being damaged.

Risk No. CO000435 Failure to achieve a sustainable long term financial position leading to negative impacts on Council’s ability to deliver on its key focus area commitments.

9 STATUTORY MATTERS

Not Applicable.

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ITEM 4 (Continued) TOURIST PARKS MARCH 2019 BUDGET REVIEW FN334/375/20(P1)

10 COUNCIL POLICIES

Not Applicable.

11 DELEGATIONS

Not applicable.

12 COORDINATION AND CONSULTATION Name and/or Title of the Directorate or Is the Stakeholder Satisfied Stakeholder Consulted Organisation With Content of Report and Recommendations (Yes/No) (comment as appropriate) Manager Community Venues & Lifestyle & Community Yes Services Branch Executive Coordinator Office of the COO Yes Directorate Finances

13 STAKEHOLDER IMPACTS

Not Applicable.

14 TIMING

Not Applicable.

15 CONCLUSION

A number of budget adjustments are required to ensure that budgets more closely reflect revenue and expenditure forecasts for 2018-19. The revenue and expenditure budget adjustments will be largely offset by the removal of the planned operating surplus transfer to reserve with a 0.8 per cent reduction in payments to the community down from $5.31 million to $5.26 million.

16 RECOMMENDATION

It is recommended that Council resolves as follows:

1. That Council note the decrease of $684,754 in the amount to be transferred to the Tourist Parks Management Reserve from the operating surplus is included within the March 2019 Budget Review report. 2. That Council note the increase of $350,000 in the amount to be transferred from the Tourist Parks Management Reserve to support the Kirra Beach acquisition policy is included within the March 2019 Budget Review report. 3. That Council note the financial management statements for the Tourist Park Business Unit as shown in attachments 2.1 and 2.2

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ITEM 4 (Continued) TOURIST PARKS MARCH 2019 BUDGET REVIEW FN334/375/20(P1)

4. That Council note budget variations per Attachments 3 and 4 are included in the March 2019 Budget Review report.

Author: Authorised by: Heather Deeley Alison Ewens Executive Coordinator Tourist Parks Director Community Services 10 April 2019

TRACKS REF: #73108856

COMMITTEE RECOMMENDATION SBF19.0513.004 moved Cr Tate seconded Cr Vorster

1. That Council note the decrease of $684,754 in the amount to be transferred to the Tourist Parks Management Reserve from the operating surplus is included within the March 2019 Budget Review report. 2. That Council note the increase of $350,000 in the amount to be transferred from the Tourist Parks Management Reserve to support the Kirra Beach acquisition policy is included within the March 2019 Budget Review report. 3. That Council note the financial management statements for the Tourist Park Business Unit as shown in attachments 2.1 and 2.2 4. That Council note budget variations per Attachments 3 and 4 are included in the March 2019 Budget Review report.

CARRIED

773rd Council Meeting 14 May 2019 68 Special Budget & Finance Committee Meeting 13 May 2019 Adopted Report

ITEM 4 (Continued) TOURIST PARKS MARCH 2019 BUDGET REVIEW FN334/375/20(P1) Attachment 1

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ITEM 4 (Continued) TOURIST PARKS MARCH 2019 BUDGET REVIEW FN334/375/20(P1) Attachment 1 (Continued)

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ITEM 4 (Continued) TOURIST PARKS MARCH 2019 BUDGET REVIEW FN334/375/20(P1) Attachment 1 (Continued)

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ITEM 4 (Continued) TOURIST PARKS MARCH 2019 BUDGET REVIEW FN334/375/20(P1) Attachment 1 (Continued)

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ITEM 4 (Continued) TOURIST PARKS MARCH 2019 BUDGET REVIEW FN334/375/20(P1)

Attachment 2.1

Tourist Parks Financial Management Statement {Accrual} Mar 19 Dec 18 Mar v Dec

Review Review Mvt % Proposed for Year Ended 30th June 2019 ($'000's) ($'000's) ($'000's) Mvt Operating Revenue

Rates and Utility Charges 0 0 0 0.0

Fees & Charges 17,737 18,120 (384) (2.1)

Community Service Obligations 0 0 0 0.0

Interest on Outstanding Rates 0 0 0 0.0

Gain/Loss on Sale of Assets 0 0 0 0.0

Contributions & Donations Revenue 0 0 0 0.0

Other Operating Income 10 24 (14) (59.0)

Total Operating Revenue 17,747 18,145 (398) (2.2)

Operating Expenses

Employee Expenses 736 736 0 0.0

Materials and Services 3,429 3,098 (331) (11.0)

Council Corporate SLA 546 546 0 0.0

Commission Costs 2,816 2,816 0 0.0

Property Managers 846 846 0 0.0

Internal Rate Charges 1,913 1,913 0 0.0

Other Expenditure 1,094 1,094 0 0.0

Total Operating Expenses 11,380 11,049 (331) (3.0)

Total Operating Profit 6,367 7,096 (729) (10.1)

Depreciation / Amortisation 1,651 1,651 0 0.0

0

EBIT 4,717 5,445 (729) (13.0)

Interest Expense (QTC loan) 306 306 0 0.0

Interest Margin Expense 23 23 0 0.0

Income Tax Equivalents 1,421 1,676 255 15.2

NPAT 2,966 3,440 (474) (13.5)

Dividend 2,417 2,206 211 9.6

0

Retained Earnings 549 1,233 (685) (52.3)

773rd Council Meeting 14 May 2019 73 Special Budget & Finance Committee Meeting 13 May 2019 Adopted Report

ITEM 4 (Continued) TOURIST PARKS MARCH 2019 BUDGET REVIEW FN334/375/20(P1) Attachment 2.2 Tourist Parks Financial Management Statement {Cash} Mar 19 Dec 18 Mar v Dec

Review Review Mvt % Proposed for Year Ended 30th June 2019 ($'000's) ($'000's) ($'000's) Mvt Operating Revenue

Rates and Utility Charges 0 0 0 0.0

Fees & Charges 17,737 18,120 (384) (2.1)

Community Service Obligations 0 0 0 0.0

Interest on Outstanding Rates 0 0 0 0.0

Contributions & Donations Revenue 0 0 0 0.0

Other Operating Income 10 24 (14) (59.0)

Total Operating Revenue 17,747 18,145 (398) (2.2)

Operating Expenses

Employee Expenses 736 736 0 0.0

Materials and Services 3,429 3,098 (331) (11.0)

Council Corporate SLA 546 546 0 0.0

Commission Costs 2,816 2,816 0 0.0

Property Managers 846 846 0 0.0

Internal Rate Charges 1,913 1,913 0 0.0

Other Expenditure 1,094 1,094 0 0.0

Total Operating Expenses 11,380 11,049 331 3.0

Total Operating Profit 6,367 7,096 (729) (10.1)

Depreciation / Amortisation 0 0 0 0.0

EBIT 6,367 7,096 (729) (10.1)

Interest Expense (QTC loan) 306 306 0 0.0

Interest Margin Expense 23 23 0 0.0

Income Tax Equivalents 1,421 1,676 (255) (15.2)

NPAT 4,616 5,090 (474) (9.2)

Dividend 2,417 2,206 211 9.6

Debt Redemption 2,163 2,163 0 0.0

Capital Expenditure 3,728 4,775 (1,046) (23.0)

Loan Funding (1,052) (2,449) 1,396 (57.0)

Transfer of prior year Deficit 82 82 0 0.0

Capital Reprovision (1,038) (1,038) 0 0.00

Transfer To/(From) Reserve (1,684) (649) (1,035) 249.7

773rd Council Meeting 14 May 2019 74 Special Budget & Finance Committee Meeting 13 May 2019 Adopted Report

ITEM 4 (Continued) TOURIST PARKS MARCH 2019 BUDGET REVIEW FN334/375/20(P1) 2018-19 Tourist Parks Capital Programme Attachment 3

Mar 19 Dec 18 Mar v Dec Review Review Project Mvt ($) % Mvt Number Project Description ($) ($) 30920 Asset Disability Access TP 0 273,187 (273,187) -100.0% 30923 TCTP Site Renewal Programme 420 0 420 New 31380 Tallebudgera Ck. TP Asset Renewal Prog. 0 200,000 (200,000) -100.0% 31391 Tallebudgera TP Water Play Acquisition 0 40,000 (40,000) -100.0% 31518 TCTP Replace Site Renovations 2,060 0 2,060 New 31539 TCTP Construct Bin Bay 2,537 19,107 (16,570) -86.7% 31540 TCTP Back Gate Wi Fi 33,651 25,041 8,610 34.4% 31952 Talleb. Creek TP ReFitout 6th Ave Ame Bl 0 100,000 (100,000) -100.0% 32011 Tallebudgera Ck.TP Electrical DSB Replce 65,000 0 65,000 New 32101 Tallebudgera Ck TP Roof & Exhst fan repl 12,000 0 12,000 New 30928 Main Beach TP Asset Fitout Renewal Prog. 0 47,512 (47,512) -100.0% 31382 Main Beach TP Asset Renewal Programme 0 35,636 (35,636) -100.0% 31523 MBTP Pool Surface Refurbishment 42,798 53,348 (10,550) -19.8% 31525 MBTP Refurbish Ensuites 20,000 0 20,000 New 31943 Main Beach Amenity Block Major Reno. 773,190 500,000 273,190 54.6% 32032 MBTP Villa 12 & 7 – Floor Replacement 28,000 16,000 12,000 75.0% 30938 Broadwater TP Infrastructure Renewal Pro 0 193,791 (193,791) -100.0% 31385 Broadwater TP Asset Renewal Programme 160,000 200,908 (40,908) -20.4% 31390 Broadwater TP Safari Tents 0 150,000 (150,000) -100.0% 31946 Broadwater TP Replace 3 Waterfront Villa 200,000 540,000 (340,000) -63.0% 31948 Broadwater TP Re-Fitout South. Amen Bloc 0 60,000 (60,000) -100.0% 32058 Broadwater T Park-Ext .Villa Painting 210,000 0 210,000 New 30992 JWTP Site Renewal Programme 331 0 331 New 31068 Jacobs Well Amenities Block/Septic Plant 5,150 0 5,150 New 31384 Jacobs Well TP Asset Renewal Prog. 0 107,703 (107,703) -100.0% 31395 Jacobs Well TP Safari Tents Acquisition 165,293 104,683 60,610 57.9% 31528 JWTP Upgrade Distribution Boards 25,000 5,000 20,000 400.0% 31529 Jacobs Well TP Villa Repairs 267,703 51,970 215,733 415.1% 31983 Jacobs Well New Power Head 0 20,000 (20,000) -100.0% 32059 Jacobs Well TP Camp Kitchen Renewal 50,000 0 50,000 New 31069 Kirra Beach TP Accomodation Ren. Prog. 4,230 0 4,230 New 31383 Kirra Beach Asset Renewal Programme 0 24,534 (24,534) -100.0% 31394 Kirra Beach TP Pre-Fab Amenity Block Acq 0 150,000 (150,000) -100.0% 31909 Kirra Beach Amenities Block Doors 14,000 0 14,000 New 31950 KBTP Re-Fitout Amenities block 0 50,000 (50,000) -100.0% 31970 Kirra Beach TP Acquisitions 1,115,000 765,000 350,000 45.8% 31982 Kirra Beach TP Dog Wash Area 57,380 10,000 47,380 473.8% 31381 Ocean Beach TP Asset Renewal Programme 0 73,578 (73,578) -100.0% 31519 OBTP Upgrade Distribution Boards 17,000 7,000 10,000 142.9% 31520 OBTP Relocate 'A' Block 330 0 330 New 31951 Ocean Beach TP Laundry & Sites 0 35,000 (35,000) -100.0% 32102 Ocean Beach TP Air Con replacements 3,500 0 3,500 New 31386 Burleigh Beach TP Asset Renewal Prog. 0 154,534 (154,534) -100.0% 31387 Burleigh Beach TP Villa Replacement 180,000 480,000 (300,000) -62.5% 31734 BBTP Villa Precinct Lighting & Fencing 0 7,468 (7,468) -100.0% Total Tourist Parks Capital 3,728,257 4,774,684 (1,046,427) -21.9%

773rd Council Meeting 14 May 2019 75 Special Budget & Finance Committee Meeting 13 May 2019 Adopted Report

ITEM 4 (Continued) TOURIST PARKS MARCH 2019 BUDGET REVIEW FN334/375/20(P1)

Attachment 4

Budget Centre Movements March - 19 Budget Review Mar 19 Dec 18 Mar v Dec Movement Review ($) Review ($) ($) CS4470C002 - Tourist Parks - Capital 991,966 991,966 0 CS4470D001 - Debt Servicing Tourist Parks 2,469,240 2,469,240 0 CS4470N001 - Income Tax Equivalent - Tourist Pks 1,421,150 1,676,277 (255,127) CS4470N002 - Dividend Tourist Parks to Council 2,417,320 2,206,248 211,072 CS4470N003 - Comp Neutrality - Int Marg Loans - T Pks 23,265 23,265 0 CS4470O001 - Transfer To Reserve - Tourist Parks 0 684,754 (684,754) CS4470O002 - Tourist Parks-Accum Surplus Bght Forward (955,948) (955,948) 0 CS4470O003 - Tourist Park General Operation 1,409,357 1,319,357 90,000 CS4470O004 - Tallebudgera Tourist Park (3,276,646) (3,417,536) 140,890 CS4470O005 - Ocean Beach Tourist Park (331,174) (331,174) 0 CS4470O006 - Main Beach Tourist Park (1,117,852) (1,256,751) 138,899 CS4470O008 - Cost Centre Plant Overhead 27,169 27,169 0 CS4470O009 - Broadwater Tourist Park (1,734,892) (2,093,912) 359,020 CS4470O010 - Burleigh Beach Tourist Park (736,312) (736,312) 0 CS4470O011 - Jacobs Well Camp Ground (226,748) (226,748) 0 CS4470O012 - Kirra Beach Tourist Park (972,203) (972,203) 0 CS4470O014 - KBTP Policy Implementation 45,955 45,955 0 CS4470S001 - SLA Office of COO to Tourist Parks 4,930 4,930 0 CS4470S002 - SLA Org Services to Tourist Parks 248,546 248,546 0 CS4470S003 - SLA L&C Mgt to Tourist Parks 292,877 292,877 0 TOTAL 0 0 0

773rd Council Meeting 14 May 2019 76 Special Budget & Finance Committee Meeting 13 May 2019 Adopted Report

CLOSED SESSION LOCAL GOVERNMENT ACT 2009 AND SUPPORTING REGULATIONS

PROCEDURAL MOTION Moved Cr Baildon seconded Cr PC Young

That the Committee move into Closed Session pursuant to section 275 (1) of the Local Government Regulation 2012, for the consideration of the following item/s for the reason/s shown:-

Item Subject Reason

5 March 2019 Budget Review Budget Matter

CARRIED

The meeting adjourned at 10.04am. The meeting resumed at 10.16am.

PROCEDURAL MOTION Moved Cr Boulton seconded Cr Owen-Jones

That the Committee move into Open Session.

CARRIED

Following resumption into Open Session, Item 5 was moved and carried as shown on page 122.

773rd Council Meeting 14 May 2019 77 Special Budget & Finance Committee Meeting 13 May 2019 Adopted Report

ITEM 5 OFFICE OF THE CHIEF EXECUTIVE OFFICER MARCH 2019 BUDGET REVIEW FN334/375/20(P1) Attachment 1 – March 2019 Budget Review

1 BASIS FOR CONFIDENTIALITY

1.1 I recommend that some aspects of this report be considered in Closed Session pursuant to section 275 (1) of the Local Government Regulation 2012 for the reason that the matter involves (c) the local government’s budget; 1.2 I recommend that the report/attachment be deemed non confidential except for those parts deemed by the Chief Executive Officer to remain confidential in accordance with sections 171 (3) and 200 (5) of the Local Government Act 2009.

2 EXECUTIVE SUMMARY

Not Applicable.

3 PURPOSE OF REPORT

In accordance with the Local Government Act 2009 and the Local Government Regulation 2012, Council may amend its budget at any time before the end of the financial year. This report is provided to Council in accordance with the statutory requirements and details budget variations submitted for Council’s consideration and adoption as part of the March 2019 Budget Review.

4 PREVIOUS RESOLUTIONS

Not applicable.

5 DISCUSSION

This report presents the March 2019 Budget Review and provides Council with an assessment of its current budget position including variations contained in the review.

The result of the March Budget Review is a Net Surplus of $361,269 which is proposed to be allocated towards the end of year surplus of $21.5 million currently proposed to underpin the 2019-20 draft budget in accordance with the ten year financial forecast.

The report is presented in the format below: Section 5.1 Budget Review Summary 5.2 Proposed Budget Variations 5.3 Review of Overall Budget Position 5.4 Recurrent Budget Impact - March 2019 Budget Review 5.5 Reserve Balances

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ITEM 5 (Continued) MARCH 2019 BUDGET REVIEW FN334/375/20(P1)

5.1 Budget Review Summary

Major variations included in the March 2019 Budget Review are: a Planning legal fee recoupments - $300,000 (Fav) b Digital City net revenue forecast reduction - $641,000 (Unfav) c Equestrian facilities expenditure decrease - $1,125,000 (Fav) d City parking net savings - $1,160,388 (Fav) e Gold Coast Sports & Leisure Centre operations - $430,260 (Unfav) f Environmental Health & City Law operations Revenue decrease - $365,840 (Unfav) g Animal management expense decrease - $251,655 (Fav) h Parking at Evandale/Bundall - $225,000 (Fav) i Griffith University Research Funding - $750,000 (Unfav) j Transfer from Cultural Precinct Reserve - $1,423,000 (Fav) k Invoice Pending Account review - $415,305 (Fav) l Insurance Premium savings - $954,377 (Fav) m Depot Operations favourable - $620,000 (Fav) n Rates Debt Recovery - $335,000 (Fav) o Waterside Air Conditioning - $500,000 (Unfav) p Merchant Fees - $480,000 (Unfav) q Transport & Infrastructure Internal Tipping Fees - $2,500,000 (Unfav)

Please refer to Table 2 for a detailed explanation of the above variations.

The proposed Budget Review produces the following net effects on general revenue:

(Fav) / Unfav • Gold Coast Water (574,883) • Gold Coast Waste Management (33,568) • Gold Coast Tourist Parks (44,055) • Other Council Activities 652,506 Nil

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ITEM 5 (Continued) MARCH 2019 BUDGET REVIEW FN334/375/20(P1)

Table 1 below provides a summary of the major net movements in the March 2019 Budget Review, by significant activity.

Table 1 Budget Review Summary

City of Gold Gold Coast Tourist Parks GCW City of Gold Coast (Other Waste Coast Activities) Management Total Net Net Net Net Net (Surplus) / (Surplus) / (Surplus) / (Surplus) / (Surplus) / Table 1: 2018-19 Budget Review Summary Deficit Deficit Deficit Deficit Deficit $ $ $ $ $

Opening Surplus 2017-18 (159,393,610) (3,599,125) (955,948) (7,083,214) (171,031,897) Surplus Underpinning the 2017-18 Budget 45,031,057 - - - 45,031,057 2017-18 Reprovisions and EOY Adjustments 114,362,553 3,599,125 955,948 7,083,214 126,000,840 September 2018 Budget Review Net Review Items (182,837) - - 182,837 - Changes in Tax Equivalents 182,837 - - (182,837) - December 2018 Budget Review Net Review Items - - - - - Changes in Tax Equivalents - - - - -

Opening Position - December 2018 Review - - - - -

Proposed Major Variations Planning Legal Fee - Recoupments (300,000) (300,000) Digital City - net revenue reduction 641,000 641,000 Equestrian Facilities (Expenditure Decrease) (1,125,000) (1,125,000) City Parking net saving (1,160,388) (1,160,388) Gold Coast Sports & Leisure Centre operations 430,260 430,260 Environmental Health & City Law operations Revenue decrease 365,840 365,840 Animal Management expense decrease (251,655) (251,655) Staff Car Parking - Evandale favourable (225,000) (225,000) Griffith University Research Funding 750,000 750,000 Transfer from Cultural Precinct Reserve (1,423,000) (1,423,000) Invoice Pending Account review (415,305) (415,305) Insurance Premium favourable (796,977) (796,977) Insurance Claims favourable (157,400) (157,400) Depot Operations favourable (620,000) (620,000) Debt Recovery Rates (335,000) (335,000) Waterside Air Conditioning 500,000 500,000 Merchant Fees 480,000 480,000 Internal Tipping Fees 2,500,000 2,500,000

Business Unit Adjustments Net operating adjustments (1,888,070) 728,809 (632,000) (1,791,261) Net capital adjustments (582,300) - 1,120,000 537,700 Transfer to / (from) Waste Management Reserve 2,503,938 - - 2,503,938 Transfer to / (from) Tourist Parks Reserve - (684,754) - (684,754) Transfer to / (from) Water and Sewerage Infrastructure Reserve - - 86,883 86,883 Increase / (Decrease) in Dividends, CSOs and Tax Equivalents 652,506 (33,568) (44,055) (574,883) -

All Other Review Items (Net) 128,850 - - - 128,850 Balance of December Budget Review (361,269) - - - (361,269)

Uncommitted Surplus (361,269) - - - (361,269) Allocation of Uncommitted Surplus To partly fund the end of year surplus of $21.5 million required to - underpin the 2019-20 budget

Proposed (Surplus)/Deficit 2018-19 (361,269) - - - (361,269)

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5.2 Proposed Budget Variations

Council’s Budget Review Policy requires that significant budget variations be addressed either through standard reports to the Special Budget Committee or via this report, depending upon the circumstances.

Table 2: March 2019 Budget Review Significant Variations Revenue Expenditure $ $ () = Fav () = Fav Economy, Planning & Environment Planning Legal Fee Recoupments (300,000) A budget allocation is being included to recognise the value of legal fees being recovered from applicants. Legal costs for the drafting of Infrastructure Agreements may initially be paid by the City, with those costs then passed on to developers. Additionally this budget item provides for reimbursement of legal costs as may be instructed by the Court in association with defending appeals. Koala Habitat Acquisition & Enhancement 700,000 (700,000) Expense favourable and revenue unfavourable $700,000 Council recently resolved (G19.0226.011) to progress the proposed acquisition of land for Koala Habitat purposes. The level of funding required for work that will be undertaken during the current financial year is approximately $100,000. The remainder of levy funding raised in 2018-19 is being returned to the Koala Habitat Acquisition and Enhancement Reserve at this review for allocation in future years. Environmental Offsets (176,090) 176,090 Expense favourable and revenue unfavourable $176,090 A revenue and expense budget is being recognised to account for Koala Habitat ecological offset funding that will be received from the Water and Waste directorate, in association with the Pimpama to Coombabah Recycled Water Release Augmentation (Stage 2) project.

Strategic Infrastructure (100,000) 100,000 Revenue favourable and expense unfavourable $100,000 The City was successful in securing State Government grant funding to assist defray the costs of developing a Growth Projections Framework and Methodology. Total funding approved is $150,000 with $100,000 expected to be received during 2018-19, with the remainder to be received in 2019-20.

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Table 2: March 2019 Budget Review Significant Variations Revenue Expenditure $ $ () = Fav () = Fav Economy, Planning & Environment Digital City Operational 1,479,500 (838,500) The Digital City Program was established to utilise data to deliver customer-centric, high quality services and investments as cost effectively as possible, and further extended to afford the city a very real and significant opportunity to drive competitive advantage, with associated economic growth.

Three key programs of work to achieve this include:

1. Optic Fibre Backbone & High-Speed Public Wi-Fi G17.0822.027 - Delivery of five work packages to deliver the optic fibre backbone and high-speed public Wi-Fi installation in time for the Gold Coast 2018 Commonwealth Games. All works completed.

2. Public Wi-Fi and Fibre Optic Investment G17.0725.014 - $3,500,000 to be borrowed internally for the delivery of additional optic fibre and public Wi-Fi services in Broadbeach, Surfers Paradise and Broadwater Parklands. All works completed.

3. Extension of the City-Owned Optic Fibre Network (Central Loop) G18.0814.012 - $10,000,000 be borrowed internally for the delivery of an extension of the optic fibre and Wi-Fi networks, via a Central Loop. Currently under construction.

To progress the Digital City program, it was necessary to fund the initial programs by borrowing internally from the Council’s Gold Coast Investment Fund Reserve. As the above programs of work are completed, the additional revenue and savings are transferred to the Economic Investment Reserve to repay the initial internal borrowings and to provide funding for future works.

Due to the Federal Government’s ruling to ban Huawei equipment from the national 5G roll out, delays have been experienced with the generation of revenues. All carriers in Australia currently use Huawei equipment, and the ruling has caused all carriers to delay their 5G investments as they will incur $100’s of millions in additional costs. The ruling has also triggered a number of structural changes in the industry as mergers and de-mergers are now occurring to separate mobile from fixed-line infrastructure in response to the Huawei ruling.

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Table 2: March 2019 Budget Review Significant Variations Revenue Expenditure $ $ () = Fav () = Fav Market interest in the City’s program remains strong and there is a high level of confidence that deals will proceed in late 2019 as 5G implications are resolved.

Additionally there is strong interest in utilising the City’s optic fibre network to supply residential and commercial internet services throughout the light rail corridor and throughout the Central Loop locations. Negotiations are ongoing with two proponents for residential and business services, building on the take up of internet services over the City’s network in the Health & Knowledge Precinct by 90% of residents.

An independent review of the business case for extension of the optic fibre network has been completed and shown that the previously forecast funds for harvesting, as approved by Council, are realisable. However, due to delays it will be necessary to adjust the 2018-19 budget relating to forecast revenues and the transfer of funds to the Economic Investment Reserve.

Revenue decrease ($1,479,500) The initial adopted budget included an estimate of $1,850,000 in revenue to be received in relation to Digital City offerings. At this review a total reduction in this revenue item of $1,479,500 is required, with revenue expected to be received in 2018-19 now estimated at $370,500.

Expenditure decrease ($838,500) The initial adopted budget included an estimate of $1,850,000 to be transferred to the Economic investment Reserve. It is now anticipated that $1,011,500 will be transferred to the Economic Investment Reserve, comprising the revised revenue estimate of $370,500 and avoided costs of $641,000 as a result of the optic fibre network removing the need to upgrade the City’s microwave network.

Economic Development (100,000) International Trade & Investment Program (ITIP) - savings of $100,000 are available from the ITIP Program due to the decision to no longer offer a GC Business Week VIP Program.

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Table 2: March 2019 Budget Review Significant Variations Revenue Expenditure $ $ () = Fav () = Fav Lifestyle & Community Strategy Risk & Performance - Project & Assets 122,600 Temporary employment of Special Projects Officer. This role is doing two pieces of work this financial year:

- Developing and integrating a directorate asset and project governance methodology for infrastructure/capital works projects. This officer will be contributing requirements and developing procedures for the directorate - $61,600

- Development of the City Libraries Strategic Framework 2019 - 2022 (previous framework 2014- 2018) - $61,000. Review and renewal of the strategic direction, service delivery standards and operating model, based on stakeholder feedback, that is aligned to the organisation’s vision and equipped to deliver value for money.

The key objectives of this review are to:

1. Define the long term strategic direction that aligns with relevant City strategies and recognised contemporary service offering. 2. Determine core business and service offerings. 3. Identify a structure that is fit for purpose.

The project scope incorporates analysis of branch products and services, strategic direction, resource allocation, technology, budgeting, processes, organisational structure and people.

Both of these pieces of work are expected to be completed by June 2019.

Libraries Digital Wi-Fi 250,000 The State Library of Queensland approved the City’s request to use $250,000 of the Library Resources Grant funding to implement the Digital Wi-Fi priority project. Funds re-allocated during the March 2019 Budget Review from Library Resources.

This project gives all City Libraries access to high speed Wi-Fi for customers and enhances and improves visitor experience. City Libraries to be connected to a new 10GBPS network which operates 10 times faster than the current network. Funding transferred from Library Collection Services, below.

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Table 2: March 2019 Budget Review Significant Variations Revenue Expenditure $ $ () = Fav () = Fav Collection Services Libraries (250,000) The State Library of Queensland approved the request to use $250,000 of the Library Resources Grant funding to implement the Digital Wi-Fi priority project. Funds transferred during the March 2019 Budget Review to Project listed above.

Library Services - Capital 211,068 (218,128) Revenue decrease and expenditure decrease $211,068 Ormeau Library Land Acquisition LGIP Budget approved for the Ormeau Library land acquisition not required this financial year. Ormeau land acquisition now finalised and the remaining budget can now be transferred back into the LGIP reserve.

($7,060) Expenditure decrease Renewal program completed at Southport Library, budget not required for the remainder of the financial year.

Library Services Grant (200,737) 200,737 Revenue increase and expenditure increase $200,737

Recognition of Grants as follows: First Five Forever $176,137 State Library of Queensland. Grant funding received for ongoing First Five Forever program, implementing early years literacy program for 0-5 year olds;

Tech Savvy Seniors $15,000 State Library of Queensland implementing digital technology training to encourage more seniors to embrace technology and improve their digital skills;

Girls who STEAM $4,600 Grant from the Department of Environment and Science - Advance Queensland Engaging Science Grant - for funding the project Girls who STEAM. This project is a dedicated program of monthly workshops just for girls, with exclusive activities across the Sciences, Technology, Engineering And Mathematics (STEAM) to inspire and unite girls aged eight years and over in their passion for science; and

Seed of Change - Stand against Domestic Violence recently awarded to Council $5,000.

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Table 2: March 2019 Budget Review Significant Variations Revenue Expenditure $ $ () = Fav () = Fav Grassed Area (620,000) Queensland has experienced the 5th warmest year on record and rainfall for the year ended 31 Jan 2019 was 340mm below average. Of note is that for the months between November and January rainfall was 255mm below average. The combination of low rainfall and high temperatures has resulted in 1 less mowing rotation. Whilst funds could be retained and grass cutting enhanced it is proposed to reduce this budget to assist in part to covering the significant costs associated with the storms in late December 2018.

Parks Tree Works 760,000 On 21 December 2018 the City was affected by a significant wind storm. The following day a severe thunderstorm with strong winds, hail, and heavy rainfall impacted the City. Parks and Landscape Maintenance responded to 753 requests for service as a direct result of the storms. There were 72 emergency call-outs after hours across Friday evening and the weekend. Both internal crews and contractors were required in the response at a total cost in the order of $600,000.

The requests included 24 made by Councillors, 417 by external customers and 312 by internal customers. Whilst many areas of the City were impacted, more than one third of the requests came from the suburbs of Robina, Mudgeeraba, and Varsity Lakes. The requests related to uprooted and damaged trees, along with the clean-up of debris strewn across roads and parks. The initial response was to clear the debris from the roads to allow access for electricity repairs to overhead power lines and make areas safe for road users and pedestrians. The actual clean-up took 6 weeks in the worst affected areas.

Parks and Landscape (10,700) (261,900) ($10,700) Revenue increase and ($261,900) expenditure decrease

($10,700) Revenue increase $10,700 expenditure increase Recognition of invoices to the State Government for a small section of road reserve, which is now Civic Park. This was a temporary arrangement which was provided through partnering with the State. This arrangement has now ceased.

$75,000 Expenditure increase Security services in parks can be split into park security (including gates opening and closing) and toilet security (including opening and closing). Currently all security contract services are settling to park security and not partly to toilet

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Table 2: March 2019 Budget Review Significant Variations Revenue Expenditure $ $ () = Fav () = Fav security.

$40,000 Expenditure increase Increase in budget for SLA Carrara Zone. Carrara was one of the worst hit areas affected by the December 2018 storms and that required significant debris clean-up and increased budget to match.

($87,600) Expenditure decrease Queen Elizabeth Park Irrigation project transferred to capital to meet our Asset Accounting obligations given the project has created a capital asset rather than maintenance. The heavily used activation areas of the Coolangatta Foreshore parks have required irrigation to support their post event/activation recovery.

($130,000) Expenditure decrease Reduction of budget for parks cost centre HOTA Landscape Works. The cordoned off construction areas (green bridge, car parks and gallery) have required less budgets to maintain these areas. The reduction is non-recurrent as the level of service requires increasing to a more appropriate level given the profile of the site.

($110,000) Expenditure decrease Reduction of budget for parks cost centre Landscape Park Supervision and Work Dispatch Hub Operations. Targeted efficiency saving.

($60,000) Expenditure decrease Reduction of budget for parks cost centre SLA Upper Coomera Zone. Outsourcing rural mowing reduced labour costs - transferred labour to Pimpama landscape that have absorbed labour positions.

Village Heart (381,450) Reduction in funding required for the Village Heart (VH) given the residential and commercial occupancy of the area is developing more slowly than forecast and some assets were delayed in being accepted by the City e.g. the water feature. The main areas of service adjusted in the 2018-19 budget are security (expected to be resourced by Smith Collective), grass area renovations (acceptable given events will not be progressed as previously forecast) cleaning of public areas and toilets (acceptable given use is expected to build more slowly than previously predicted and having less events) as well as a reduced contingency allowance. The level of maintenance will be reduced to be aligned with other profile parks.

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Table 2: March 2019 Budget Review Significant Variations Revenue Expenditure $ $ () = Fav () = Fav Gainsborough Greens 1,820,000 (1,820,000) Revenue decrease and expenditure decrease $1,820,000 Gainsborough Greens district sport LGIP This budget adjustment reflects that in 2017-18 there was the recognition of $4 million in infrastructure charges credits for sports field works. Whilst that was recognised, works under the Infrastructure Agreement (IA) have just now been completed. As such the budget in 2018-19 should not have duplicated the IA allocation and this review reflects that correction. Equestrian Facilities (1,125,000) Council previously resolved to retain funds for future equestrian facilities in response to needs triggered by erosion at Charlie’s Crossing. Various investigations are continuing and officers are reviewing reports on modelling by TMR associated with the John Muntz bridge which influences the future response to erosion at Charlies Crossing. An allocation of $50,000 will be retained for works this financial year, with the remainder of funding returned to Council. Future allocation of funds for equestrian facilities will be subject to further consideration by Council.

Major Sporting Areas - Other (130,885) ($100,000) Expenditure decrease Access Queensland Education Schools Advice has been received that there will be a delay to the planned implementation of recycling water lines to enable irrigation to be connected to selected school sites. Works will be programmed accordingly in future years.

($30,885) Expenditure decrease Luke Harrop High Performance Cycle Circuit Project was staged with final works to incorporate a turning circle for riders. Due to the high cost estimate and insufficient funds available, these works have been deferred.

Miami Pool (210,000) Cost savings due to tighter control over contracts and also a reduction in operations and maintenance costs as the facility is prepared for major redevelopment in late 2019. Savings include chemicals and gas ($60,000), electricity ($66,000) and other expenses ($84,000). Operating cost savings have also been built into the 2019-20 base budget as a result of planned construction works commencing November 2019.

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Table 2: March 2019 Budget Review Significant Variations Revenue Expenditure $ $ () = Fav () = Fav Helensvale Golf Course 300,000 Council has previously resolved to maintain the Helensvale Golf Course as a site for golf. Recent attempts to attract an operator have been progressed and Council will need to consider its options for the site. A report on this site is being prepared for Special Budget & Finance Committee. In the interim there is a need to continue to undertake basic maintenance and continue a level of security at the site.

Gold Coast Aquatic Centre 240,000 Expected shortfall in centre income due to a slower uptake of memberships and programs since opening the facility in Winter after close to six months closure for GC2018. Assumptions have factored in revenue uplift associated with Spring into Summer and school holiday activities over the summer period and planned and booked events. Gym Membership - $140,000 reduction Learn to Swim - $100,000 reduction

Palm Beach Pool (290,000) 286,000 ($290,000) Revenue increase, $286,000 expenditure increase

Revenue increase ($290,000) Patronage numbers have increased, resulting in an increase in revenue generated by the centre. Membership based programs (Fitness Centre, Learn to Swim, Swim Squad Programs) now exceeding that of the former operator.

Expenditure Increase $286,000 The takeover of the pool has generated greater than planned labour costs primarily over the winter trading period. The pool was taken back into Council management in late 2017, and the 2018-19 budget preparation was made before the pool had operated through a winter period. Assumptions were that labour costs could reduce by 25% during 6 months of the off peak season. Actual pool operating hours have only been reduced by 3 hours per week over the 3 month winter period and the assumed labour reduction has not materialised. In addition, increased program offerings and out of hours community access has contributed to an overall increase in operating costs, totalling $286,000, including chemical and gas increases of $46,000.

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Table 2: March 2019 Budget Review Significant Variations Revenue Expenditure $ $ () = Fav () = Fav Animal Control - Operations (277,249) ($82,400) Saving realised this financial year as not all funds reprovided from 2017-18 to progress Service Delivery Review (SDR) implementation have been required. ($136,480) Supervisor Animal Management position vacant during the 2018-19 financial year was re-purposed in line with the Branch Service Delivery Review (SDR). ($32,775) Animal Management Officer position vacant 50% of the year due to City Cover claim. ($25,594) Funding transferred from the Stapylton Pound Operations budget to fund renewal and major enhancements to the old fence at the Stapylton Pound.

Tourist Parks - Capital 1,046,427 (1,046,427) Revision of proposed CAPEX expenditure pending new Infrastructure Investment Plan. The 2018-19 Capital budget was prepared in late 2017 ahead of the Council endorsement of the Gold Coast Tourist Parks’ vision and strategy. Objective 1 of the Strategy outlines the need for significant improvement and redevelopment of the current aged facilities to ensure they are befitting of the Caravan and Camping Industry which is a $19 billion industry and has grown year on year for the past 6 years. A new Infrastructure Investment Plan is currently being developed and all current renewal work has been assessed on a case by case basis to ensure that funds are not expended on facilities that will be replaced in the Investment Plan. As such, projects have been removed from the current program, with a corresponding reduction in loan funds to ensure that future funds and opportunity are available.

A separate report on Tourist Parks has been prepared as part of this review and includes details of budget amendments.

Transfer To Reserve - Tourist Parks (684,754) In light of 2018-19 financial performance, it is proposed to remove the budgeted transfer to the Tourist Park Reserve and use these funds to maintain the level of dividend and income tax equivalents.

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Table 2: March 2019 Budget Review Significant Variations Revenue Expenditure $ $ () = Fav () = Fav Broadwater Tourist Park 259,020 100,000 $259,020 Revenue decrease, $100,000 expenditure increase

Revenue decrease $259,020 The current projected revenue for Broadwater Tourist Park is lower than forecast budget. A 5.8% adjustment is required to the current budget which was set late 2017 before heavy discounting from other accommodation providers was known and has impacted on the ability to continue to achieve high occupancy together with high room rates. Broadwater Tourist Park is forecast to achieve $4.1 million (94.2% of the initial revenue forecast) and there is a continued focus on increasing our marketing channels and improving our stock to ensure we remain competitive in a market which continues to grow. Gold Coast Tourist Parks continue to exceed industry benchmarks by way of occupancy and room rates. Revenue reduction includes:

$90,000 - Cabin accommodation; $125,720 – Tourist/short term income; $9,300 – Permanent rental income; $26,000 - Washing machines fees; and $8,000 – Other sales

Expenditure increase $100,000 The total budget required for maintenance of the Broadwater Tourist Park is $165,660 which is $100,000 greater than original budget of $65,660 for planned and reactive maintenance. Reactive maintenance has significantly increased due to ageing of the asset base as identified through the Tourist Park Strategy. With planned renewal programs progressing through the last quarter of 2018-19 and 2019-20 this will be adjusted back over time. Included in this request is $25,700 for non-recurrent unplanned additional budget required for Level 1 & 2 electrical testing which has become urgent.

Tourist Park Operations 138,899 230,890 $138,899 Revenue decrease, $230,890 expenditure decrease

Main Beach revenue reduction $138,899 The current projected revenue for Main Beach Tourist Park is lower than forecast budget. A 5% adjustment is required to the current budget which was set late 2017 before heavy discounting from other accommodation providers was known and has impacted on the ability to continue to achieve high occupancy together with high room rates. This has mainly impacted the two parks central to Surfers Paradise. Main

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Table 2: March 2019 Budget Review Significant Variations Revenue Expenditure $ $ () = Fav () = Fav Beach Tourist Park is forecast to achieve $2.5 million (95% of the initial revenue forecast) and there is a continued focus on increasing our marketing channels and improving our stock to ensure we remain competitive in a market which continues to grow. Gold Coast Tourist Parks continue to exceed industry benchmarks by way of occupancy and room rates.

$80,000 - Tourist Parks - Cabin Accommodation reduction $58,899 - Tourist Parks - Tourists reduction

Tallebudgera Creek expenditure increase $140,890 The total budget required for maintenance of the Tallebudgera Tourist Park is $317,190, which is $140,890 greater than the original adopted budget of $176,300 for Planned and Reactive Maintenance. Reactive maintenance has significantly increased due to ageing of the asset base as identified through the Tourist Park Strategy. With planned renewal programs progressing through the last quarter of 2018-19 and 2019-20 this will be adjusted back over time. $34,860 non-recurrent unplanned additional budget included and required for Level 1 & 2 electrical testing which has become urgent due to a number of recent power outages affecting the whole park.

Tourist Park Operations expenditure increases $90,000, breakdown as follows:

$40,000 Asset Audit Condition Report - a further $40,000 is required for the full asset condition audit to capture all assets across the seven mainland Gold Coast Tourist Parks at an average of $12,500 per park for the full audit, data sheet (SAP ready) and report. The current register is insufficient for sound asset lifecycle management as it currently captures around 5,000 assets which is less than half the actual number of assets and cannot be used for renewal or maintenance planning. This work was necessary to complete our Asset Management Plan with sufficient detail and accuracy to ensure meaningful data is captured to feed into the business and City long term planning.

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Table 2: March 2019 Budget Review Significant Variations Revenue Expenditure $ $ () = Fav () = Fav $19,000 - Management Gold Coast Tourist Parks specification documentation - The tender for the Management of the Gold Coast Tourist Parks is due to go back to market in July 2019 after a decision was made to not take-up extension options. There have been a number of issues with the current contract and a marked change in the way that the industry now contracts managers. A procurement and contracting specialist has been engaged to assist in re-writing the procurement/specification documents to ensure that contracts, potentially worth $16 million over the next 5 years, provide the best value for money for the City together with the best outcome for guests.

$14,000 - Expected procurement costs for the tender process for the Management of Gold Coast Tourist Park contracts. Cost include procurement activities, advertising, marketing and social engagement costs. This was not budgeted as the contract does not expire until October-November 2019 however the majority of the procurement activity and cost will fall in 2018-19.

$17,000 - Integrated Site Designs - funding for the Gold Coast Tourist Parks Investment Plan, including survey planning and other costs was originally $200,000 split over 2018 and 2019 at $100,000 per year. All costs will now fall within the 2018-19 financial year as Integrated Site Designs have now been engaged in the current financial year with a completion date of April 2019. In addition, use has been made of the majority of existing older survey plans which have been updated manually for the purpose of the higher level Investment Plan. Total engagement costs will be $127,000 (representing savings against the original $200,000).

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Table 2: March 2019 Budget Review Significant Variations Revenue Expenditure $ $ () = Fav () = Fav Regulated Parking (605,624) (554,764) ($605,624) Revenue increase ($554,764) expenditure decrease

Revenue increase ($1,063,624) non-recurrent. ($963,080) Revenue increase for bad debts recovered. This represents recovery of infringements which were transferred to the provision for doubtful debts during the migration of old debts to the Pathway system, and in accordance with the policy to write off all debts that have been with the State Penalty Enforcement Register (SPER) for over 12 months. SPER continued to collect these doubtful debts and an amount of $963,080 is being recognised in this Review for debts collected by SPER and paid to Council. ($15,544) Revenue increase for SPER registration recoupment fee also received after previously having been written off. ($85,000) Revenue increase for infringement fines. Increase to this budget is due to the availability of a casual staff pool which has reduced the impact of short term/unforeseen staff absenteeism due to leave and resignations on the current year's budget.

Expenditure decrease ($96,764) ($164,000) Legal fee budgets reduced due to an increase in court elections being finalised prior to court appearance and an increase in persons providing further information to the City before electing to go to court. ($62,000) Various materials and services budgets such as staff uniforms, cleaning, printing, equipment and supplies and postage were reduced this financial year. $129,236 Additional overtime for the Administration team required due to a back log in correspondence received by Council.

Revenue decrease $458,000 and expenditure decrease ($458,000) Fewer overdue infringements have been referred to SPER than anticipated this financial year. More people are opting to either pay within time or after the issue of reminder letters prior to the infringement being passed over to SPER for collection, resulting in a reduction in the SPER collection fee payment and the subsequent recovery of this charge from the holder of the infringement.

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Table 2: March 2019 Budget Review Significant Variations Revenue Expenditure $ $ () = Fav () = Fav Environmental Health & City Law Services Operations 365,840 (89,000) $365,840 Revenue decrease and ($89,000) expenditure decrease

Revenue decrease $365,840 $393,040 Revenue decrease due to the number of Penalty Infringement Notices and prosecutions being down, primarily due to less litter and environmental offences being detected. Many regulated activities were also brought into high levels of compliance in preparation for the Commonwealth Games. ($27,200) Revenue increase. Abandoned vehicle auctions realised higher than anticipated prices.

Expenditure decrease ($89,000) ($40,000) Expenditure decrease to the Parks Supervision budget. City Laws staff are delivering enforcement services to City Parks using "business as usual" operational funds. ($49,000) Expenditure decrease for Local Law State Penalty Enforcement Register (SPER) lodgement fees due to fewer Penalty Infringement Notices issued and referred to SPER than anticipated.

Gold Coast Sports & Leisure Centre 127,960 302,300 $127,960 Revenue decrease and $302,300 expenditure increase

Revenue Decrease $127,960 Revenue forecast will not meet budget due to limited event business throughout December and the last week of January. These months, as well as February are also traditionally quieter periods for regular hirers and locational customers (e.g. SUNS staff and AFL Qld) reducing food and beverage sales. With no comparable historical data, it was previously assumed January and February would see business levels return to those similar to the first half of the financial year, however this did not occur. Accurate forecasts of business levels have been difficult following re-opening.

Expenditure Increase $302,300 The nature of operations of this venue pre and post Games has presented difficulties in accurately forecasting venue usage and related costs. Operations are beginning to normalise but increased costs this financial year relate to: - Increased security costs of $75,000 up until November 2018 relating to additional coverage of morning hours; - Unbudgeted costs for IT and telecommunications including On the Net event services and ATI micro link support $25,000; - Additional operational and event based costs of $81,500 including event fleet and hire costs, internal waste

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Table 2: March 2019 Budget Review Significant Variations Revenue Expenditure $ $ () = Fav () = Fav charges, chemical and gas costs, protective service costs including fire maintenance; - Higher than forecast costs for servicing and maintenance of air conditioning and the building energy management system $22,800 ; - Increased food and beverage cost of sales of approximately $115,000 with a review of contract suppliers and stock management currently in progress expected to provide efficiencies in the next financial year. - Casual labour associated with events and catering of $35,000 based on community usage and events this financial year. - Partially offsetting savings of ($52,000) have been realised in relation to electricity usage and as a result of converting cleaning services from agency to contract.

Gold Coast Sports & Leisure Centre – Grant Funded (158,190) 158,190 Repair Works Funding recognition from Department of Innovation, Tourism Industry Development Office of the Commonwealth Games. The funding contribution is to repair remedial works to the flooring at Gold Coast Sports and Leisure Centre. Works expected to be completed and invoiced by early June 2019.

Entomology - Capital 250,000 Update from outdated Access 2003 database to manage service requests, work flows, mosquito sampling, surveillance and treatment data. New system will provide flexibility and mobile device support. The system generates property based (GIS) and mobile platform based (currently paper based) work flows. It is proposed that savings in the Pest Control budget centre are funding this project.

Pest Control (250,000) ($150,000) Labour savings. Savings as a result of labour due to extended Long Service Leave ($100,000) Savings due to only 5 Aerial Treatment programs for this year instead of seven. Seven (7) treatments were budgeted for given the number and height of the predicted tides. The lower than expected number of aerial treatments conducted so far this season is a result of tidal inundations not occurring as predicted. Aerial treatments are necessary when tidal inundation of saltmarsh breeding areas occurs. Tide heights in excess of 1.60m at the GC Seaway flood the marshes triggering mosquito larval emergence. On 2 occasions the predicted tides failed to reach predicted heights and therefore treatments were not necessary.

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Table 2: March 2019 Budget Review Significant Variations Revenue Expenditure $ $ () = Fav () = Fav Office of the CEO Parking at Evandale / Bundall (100,000) (125,000) $125,000 Expenditure reduction, $100,000 revenue increase.

$125,000 Non-recurrent expenditure savings identified in 2018-19 on Shuttle Bus to Racecourse as the forecast expenditure is less than the budget for the year.

$100,000 Non-recurrent increase to Staff Car Parking The initial revenue budget for 2018-19 was set lower in anticipation that the number of staff car parking spaces reduced with the changes to the Evandale site. The actual revenue to end of March has exceeded the budget.

Separation Costs from Allconnex (200,000) The lease of the Rocket building ceased on the 20 March 2019, and the budget for 2018-19 of $600,000 was set to cover the lease cost, electricity and the costs associated with the relocation and the storage of the remaining furniture and equipment. It’s anticipated that the expenditure will be lower than the budget by $200,000.

City Projects - Griffith University Research Funding 750,000 In March 2018 Council approved funding of $750,000 (Council Resolution G18.0313.017) towards a research partnership between the Institute of Glycomics (IoG) and the Fraunhofer Institute. The funding was intended to be provided in two equal instalments of $375,000 in 2017-18 and 2018-19. No funding milestones could be met in 2017-18 year as the project was in its infancy, as such unutilised funds from Investment Attraction Program (IAP) allocation for that year were declared as savings. The project has advanced over the past 12 months and the project is likely to meet all its milestones in the coming months. Council at its meeting of 12 February 2019 approved changes to the original funding agreement milestones. As such a new funding agreement is being drafted to reflect these changes. Funding payment criteria for all milestones are likely to be met by the IoG in mid-2019, as such it is necessary for the City to meet its funding commitment by end of 2018-19 financial year.

773rd Council Meeting 14 May 2019 97 Special Budget & Finance Committee Meeting 13 May 2019 Adopted Report

ITEM 5 (Continued) MARCH 2019 BUDGET REVIEW FN334/375/20(P1)

Table 2: March 2019 Budget Review Significant Variations Revenue Expenditure $ $ () = Fav () = Fav Office of the COO General Loan Borrowings (350,000) General loan borrowings to be increased by $350,000 to fund the sixth purchase of the MHA site at Kirra Tourist Park.

Invoice Pending Account (415,305) The review of the Invoice Pending account (GRIR) has resulted in a credit balance of $415,305 in the 2018-19 budget. Expenses are recognised against a cost centre / project when goods are received against a purchase order and this also results in a corresponding credit to the invoice pending liability account. The invoice pending liability account is reviewed on a regular basis for old outstanding purchase order receipts with no matching invoice and such receipts are reversed to clear the liability and correct the profit and loss. Where the purchase order receipt (expense) relates to a prior financial year, this results in a credit to revenue.

City Transport Improvement Separate Charge 225,000 An additional $225,000 is requested to be transferred to City Transport Improvement Separate Charges Reserve as the revenue received from the levy is higher than the anticipated revenue due to increased number of rateable properties. There is a corresponding increase in revenue shown under Organisational Services in this table. Transfers To and From Reserves (1,728,100) 655,100 $655,100 Expenditure increase, $1,423,000 revenue increase

Cultural Precinct Reserve - $305,100 expenditure increase. $305,100 is requested to be transferred to Cultural Precinct Reserve. As per Council Resolution G17.0517.007, it was resolved that the revenue from Gold Coast Airport Ex Gratia Rates will be used to fund the Cultural Precinct Stage 1.

$305,100 revenue received from Gold Coast Airport (ex gratia rates) for 2018-19. This revenue increase is offset by a transfer to the Cultural Precinct Reserve, above.

Tourist Park Reserve - $350,000 Expenditure increase. $350,000 requested to be transferred to Tourist Park Reserve to cover the capital expenditure associated with the Kirra Beach Tourist Park. This funding request is to purchase a property from a Kirra Beach Tourist Park resident under a special circumstances application as part of the MHA acquisition at Kirra Beach Tourist Park.

773rd Council Meeting 14 May 2019 98 Special Budget & Finance Committee Meeting 13 May 2019 Adopted Report

ITEM 5 (Continued) MARCH 2019 BUDGET REVIEW FN334/375/20(P1)

Table 2: March 2019 Budget Review Significant Variations Revenue Expenditure $ $ () = Fav () = Fav $1,423,000 Revenue increase The funding plan for Stage 1A of the Cultural Precinct included $27 million in proceeds from land sales, much of which was received after the funds were required for the project. The project received a bridging loan from the Investment Fund Reserve to help manage the cash flow issues that this presented. The loan from the Investment Fund Reserve was scheduled to be repaid partly in 2018-19 and partly in 2019-20. The initial budget included the repayment to the Investment Fund Reserve but not the proceeds from the sale of properties, which have now all been transferred to the Cultural Precinct Reserve. This transfer from reserve is to provide the funding for the repayment to the Investment Fund Reserve. As the repayment was included in the initial budget, this transfer will have a favourable impact on the budget bottom line.

Workers' Comp Administration (400,000) 400,000 $400,000 Expenditure increase and $400,000 revenue increase

A review of the worker compensation claims expenditure as at 4 March 2019 indicates that there is an increase in estimated payments for 2018-19. Payments to 30/06/2019 are now expected to be approximately $5.46M (including overheads), therefore the Claims budget is requested to be increased by $400,000. This increase is offset by a transfer of $400,000 from the Workers’ Compensation Reserve.

Premiums - Captive Insurance (796,977) Insurance premium expense budget reduced by $796,977 in this review as the actual premium paid for the year is less than the budget.

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ITEM 5 (Continued) MARCH 2019 BUDGET REVIEW FN334/375/20(P1)

Table 2: March 2019 Budget Review Significant Variations Revenue Expenditure $ $ () = Fav () = Fav Industrial Special Risk/Property-Captive (256,400) (50,000) $60,000 Expenditure reduction, $256,400 revenue increase.

Expenditure budget reduced by $50,000 as the number of claims to date is lower than the planned expenditure and it is expected that the trend will continue for the remainder of the financial year.

$256,400 increase to revenue budget based on the anticipated trend for the remainder of the financial year. The increase to revenue budget is a reimbursement from City of Gold Coast Insurance Company (CGCIC) and recovery of damages to Council assets. Reimbursement from CGCIC for the first half of the year exceeds the annual revenue budget. There are also a number of claims settled in the second half of the year that are expected to be fully reimbursed in the June 2019 payment. Liability - Captive Insurance (1,000,000) 1,137,400 $1,137,400 Expenditure increase and $1,000,000 revenue increase

An additional $1,137,400 expense budget is requested to fund the increased number of claims and settlements in this financial year. $1,000,000 is expected to be reimbursed by the City of Gold Coast Insurance Company in this financial year.

Other Classes - Captive Insurance 262,000 (359,600) $359,600 Expenditure reduction and $262,000 revenue reduction. Expenditure budget reduced by $359,600. $100,000 is transferred to Directors & Officers Liability. As the cost to this class is increasing due to legislative changes, a new budget centre has been created to capture these costs separately.

$259,600 expenditure reduction as the number of claims to date is lower than the planned expenditure and it is expected that the trend will continue for the remainder of the financial year.

Revenue budget reduced by $262,000 due to the reduction in claims expenditure. It is expected that the reimbursement will be minimal for the rest of the year.

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Table 2: March 2019 Budget Review Significant Variations Revenue Expenditure $ $ () = Fav () = Fav Asset Management Improvement Program 160,000 Coordination of Maintenance Management improvements - $140,000.

Funding is requested for Coordination of Maintenance Management improvements across the organisation including 1 full-time temporary position for two years.

Approval of funding via the March 2019 Budget Review provides funding for the first year for this position. A further budget submission to be made via the 2020-21 budget process to fund the second year for this position.

The new integrated Maintenance Management System and associated field mobile computing solution were implemented as part of the ERP Project Release 2 go-live in May 2014. With the initial focus being on getting the basic maintenance practices in place for infrastructure and fleet assets.

A detailed maturity assessment of maintenance practices was recently completed that included Transport & Infrastructure, Water & Waste, Lifestyle & Community, Organisational Services (Property Services & Fleet). The maturity assessment identified 112 improvement opportunities that have potential to add substantial benefits across all of these areas and the associated road, drainage, water, sewer, parks and community building assets, including:

- Further leveraging the capabilities of the Maintenance Management System that was implemented in 2014 - Recording better information on completed maintenance activities to inform future budgets and make decisions on the types of maintenance needed. - Improved planning and scheduling of maintenance works, so there is a better understanding of when work will be done, along with improving the ability to bundle up work to be done in a particular area resulting is less trips by work crews - Investigating options for better procurement arrangements for maintenance parts & materials, to get better deals for the City and potentially reduce travel time for work crews picking up parts & materials

The maturity assessment also highlighted why improving maintenance practices are important, as the City has: - Over one and half million infrastructure and fleet assets - A maintenance & operations field workforce of around 1000 staff with more than 500 mobile devices (i.e. iPADs) deployed to support maintenance & operations functions

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Table 2: March 2019 Budget Review Significant Variations Revenue Expenditure $ $ () = Fav () = Fav - Over a quarter of a million Work Orders are undertaken annually - A range of maintenance & operation functions undertaken through contracts with external providers.

This position is required to support Transport & Infrastructure, Water & Waste, Lifestyle & Community and Organisational Services (Property Services & Fleet) in improving maintenance practices through: - Provide information to the directors to inform the prioritisation of improvement initiatives, including information on the dependencies between improvement initiatives - Develop an overall implementation plan for improving maintenance practices - Coordinating the improvement initiatives identified in the recent maturity assessment that involve multiple directorates - Supporting the directorates with the collation and justification of ICT system needs/changes - Providing status reports to directors

Note: The full-time temporary position for 18 months that undertook the detailed maturity assessment finished in February 2019. The requested position is a continuation of this work.

Program & Project Management of asset management improvements - $20,000.

Additional funding for Program/Project Manager for management of asset management improvements across the organisation, One full-time temporary position for one year.

Note: Approval of funding via the March 2019 Revised Budget (along with funding already available in the Corporate Asset Management 2018-19 branch budget) provides funding for this position.

The Asset Management Improvement Program is in place to support Asset Custodians in Transport & Infrastructure, Water & Waste, Lifestyle & Community & Organisational Services (Property Services) and the Corporate Asset Management branch in further advancing their asset management practices. The most recent detailed Asset Management Maturity Assessment identified 113 improvement opportunities, with the Asset Management Improvement Program now having over 600 identified initiatives/actions. These initiatives cover a wide range of improvements such as:

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Table 2: March 2019 Budget Review Significant Variations Revenue Expenditure $ $ () = Fav () = Fav

- Improving integrity of and access to asset information to support a wide of business needs e.g. Asset Revaluations (and other Queensland Audit Office requirements), Asset Management Plans, various operational business functions, etc. - More rigour in identifying defects and undertaking condition assessments of assets - Ensuring all Asset Management Plans meet minimum requirements and are further advanced to optimise asset investment decision making - Further developing the organisation's asset management policies and frameworks to better enable management of asset based services

It is important to note that one of the seven key findings of the most recent Asset Management Maturity Assessment (conducted by specialist consultants) was "need to strengthen the whole-of-organisation approach to driving asset management improvements", including "program management needs to be strengthened".

The increase in scope and complexity for this position includes being the project manager for the re-development of the Asset Management Framework that has not been reviewed since 2009 and needs to be completely re-built to better support Asset Custodians in Transport & Infrastructure, Water & Waste, Lifestyle & Community and Organisational Services (Property Services) in managing the City's infrastructure asset base (nearly $19 billion). This will include aligning with the International Standards for Asset Management that were first released five years ago, with there being a clear industry trend of large asset intensive organisations (including Water Utilities) adopting and implementing the International Standards to increase the level of rigour in managing infrastructure assets.

Asset & Maintenance Management ICT Systems 150,000 Enhancement of Asset & Maintenance Management ICT Systems

As part of the ERP Project Release 2 the following Asset & Maintenance ICT Systems were implemented and went live in May 2014:

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ITEM 5 (Continued) MARCH 2019 BUDGET REVIEW FN334/375/20(P1)

Table 2: March 2019 Budget Review Significant Variations Revenue Expenditure $ $ () = Fav () = Fav ­ A consolidated Asset Register to record and manage asset data ­ The new integrated Maintenance Management System and associated field mobile computing work order management application

There are over 1.5 million infrastructure and fleet assets recorded in these ICT systems, with these ICT systems dispatching over a quarter of a million Work Orders annually (via 500 field mobile devices) to the City’s maintenance & operations field workforce of around 1000 staff

Since these systems went live five years ago, Asset Custodians and Maintenance areas in Transport & Infrastructure, Water & Waste, Lifestyle & Community and Organisational Services (Fleet & Property Services) have identified 23 different Asset & Maintenance Management ICT improvements needed to improve delivery of asset based services to the community. This funding is requested to support the directorates in progressing immediate priorities through:

­ Providing a solution for capturing and storing information from asset defect & condition assessment field inspections for a range of asset types such as roads, bridges (including detailed structural inspections), pathways, retaining walls, playgrounds, electrical assets, etc. ­ Investigating option to provide external contractors with access to the City’s Maintenance Management System to ensure Work Orders can be quickly issued to external contractors and the details of work undertaken by the external contractors can be uploaded into the City’s Maintenance Management System.

The above items are key ICT capabilities that the directorates need to maintain the City’s assets and manage the risk associated with these assets.

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ITEM 5 (Continued) MARCH 2019 BUDGET REVIEW FN334/375/20(P1)

Table 2: March 2019 Budget Review Significant Variations Revenue Expenditure $ $ () = Fav () = Fav Major Events Support (530,000) 530,000 $530,000 Expenditure increase, $530,000 revenue increase

Eurovision (Australia Decides) Council resolved (G18.0921.018) that the Council will contribute a maximum of $150,000 with funding to be allocated from the Events Reserve.

Sport Accord The City will contribute $300,000 cash to support the Sport Accord Convention and this expenditure budget to be funded from Events Reserve (Council Resolution - G18.0814.019).

Combined Churches Easter Event Council resolved that the Council will provide one-off support to the 2019 Combined Churches Easter Celebrations to be held in April 2019 at the HOTA Outdoor Stage via in kind support of up to $80,000, with the source of funds being the Events Reserve (G19.0130.028).

Corporate Planning & Performance 109,000 Project On-line - $109,000 The successful implementation of Project On-line for Water & Waste in late 2017-18 has provided the first cloud based portfolio, program and project management solution for the City. This solution provides real-time information on projects and remote access on mobile devices, so the solution can be used in the field. As Directorates transition their projects onto this new solution, two legacy city project management solutions (PMIS 2010 and Clarity) will be retired, providing real-time and timely information from a single source of truth for City projects.

Funding approved for Phase 2 of the project ($180,000) provided for a part-time project manager in 2018-19 based on an assessment of the implementation plan and the project has identified that additional resources are required to support the finalisation of this project phase. Additional funding requested will provide the project with a full-time specialist project manager (additional $85,000) and a part-time testing lead ($24,000). Both of these resources are highly technical and not available from business as usual resources. It is anticipated that Phase 2 will be completed by 30 June 2019.

Phase 3 of the project, subject to the provision of funding in the 2019-20 budget, will focus on ensuring that the solution provides the capability to support all other project types (business change and technology). This final phase will complete the capability required to run all project types, enabling all remaining directorates to transition their projects

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ITEM 5 (Continued) MARCH 2019 BUDGET REVIEW FN334/375/20(P1)

Table 2: March 2019 Budget Review Significant Variations Revenue Expenditure $ $ () = Fav () = Fav onto a single City solution. Completion of Stage 3 is scheduled for June 2020, with the possibility of some decommissioning costs in the 2020-21 financial year.

WHS Governance Services 100,000 $100,000 is requested to provide a temporary resource for 12 months to scope and develop the relevant procedures and supporting documents to comply with the Heavy Vehicle National Law.

In October 2018, the Heavy Vehicle National Law (HVNL) was amended to specify that every party in the heavy vehicle transport supply chain has a primary duty of care to ensure the safety of their transport activities. The supply chain typically includes the employer of a driver, the operator of the vehicle, a scheduler for the vehicle, a loading manager for any goods in the vehicle, loader and/or unloader of the vehicle, a consignor of any goods for transport by the vehicle, a consignee of any goods in the vehicle and a loader and/or unloader of any goods in the vehicle. In a prosecution, the courts may consider the actions of each party in the supply chain. This includes what measures those parties have in place to prevent breaches of the HVNL occurring. Each party in the chain must demonstrate to the Court that they took all reasonable steps to prevent the contravention or show the court that there were no steps they could reasonably be expected to have taken to prevent the contravention.

This requirement applies across various areas of Council, but specific examples include the transfer of waste by truck from recycle centres to landfill and the transport and delivery of plant and equipment to construction sites.

As with workplace health & safety, an effective safety management system will assist Council in complying with legislative obligations to meet the Heavy Vehicle National Law.

In order to address the legislation, a gap analysis is required to identify procedures that require development to meet the Heavy Vehicle National Law.

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ITEM 5 (Continued) MARCH 2019 BUDGET REVIEW FN334/375/20(P1)

Table 2: March 2019 Budget Review Significant Variations Revenue Expenditure $ $ () = Fav () = Fav Organisational Services Fleet, Plant & Equipment (853,171) 853,171 ($853,171) Revenue Increase. Increase in revenue due to transfer from Fleet reserve.

$225,821 Expenditure Increase. The increase in expenditure for Minor Equipment is due to a rise in operational costs, in particular fuel costs, and a reduction in labour recovery resulting from adjustments to the number of hours booked to work orders in the workshops and operational areas. In total, $401,944 is proposed to be absorbed through a transfer from the Fleet Renewal & Purchase Reserve.

$342,556 Expenditure Increase. The increase in expenditure for General Plant is due to a rise in operational costs, in particular fuel costs, and a reduction in labour recovery resulting from adjustments to the number of hours booked to work orders in the workshops and operational areas. In total $396,637 is proposed to be absorbed through a transfer from the Fleet Renewal & Purchase Reserve.

$152,054 Expenditure Increase. The increase in expenditure for Two Way Radios is due to a rise in operational costs and a reduction in labour recovery resulting from adjustments to the number of hours booked to work orders in the workshops and operational areas.

$132,740 Expenditure Increase. The increase in expenditure for Heavy Plant & Trucks is due to a rise in operational costs, in particular fuel costs, and a reduction in labour recovery resulting from adjustments to the number of hours booked to work orders in the workshops and operational areas.

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ITEM 5 (Continued) MARCH 2019 BUDGET REVIEW FN334/375/20(P1)

Table 2: March 2019 Budget Review Significant Variations Revenue Expenditure $ $ () = Fav () = Fav Depot Facilities (620,000) ($620,000) Expenditure decrease. Depot facilities maintenance funds are not required this year as future depot plans have not been confirmed. Works will be scheduled for 2019-20 depending on the outcome of future plans. These works will include repairs to existing buildings, hardstands, access and fencing. Depots and amounts include:

Tugun $100,000; Coomera $100,000; Carrara $200,000; and Miami $100,000

Depot Asset Audits $120,000 Only partial audits were carried out this financial year. These will be carried out in 2019-20 to supply condition ratings for individual assets which will be used to determine more accurate lifecycle budgets for 2020-21 and subsequent years. Property Rationalisation (90,735) 557,735 $217,000 Revenue decrease. Sale of 1 Paddington Place, Robina - only a subdivided portion of the original site was sold. The newly created subdivided portion has the address of 209 Robina Town Centre Drive (cnr Laver Drive). The balance of the site retained by Council is officially 1 Paddington Place.

REDACTED

$200,000 Expenditure increase. Additional funds are required for works at Hutchinson Street, Burleigh Heads. Funds are required as a result of a contract variation due to adverse ground conditions (rock) and the location of inground services that were not reflected in the available/existing drawings.

$313,160 Revenue increase & $363,160 expenditure increase.

REDACTED

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Table 2: March 2019 Budget Review Significant Variations Revenue Expenditure $ $ () = Fav () = Fav

$5,425 Revenue decrease and $5,425 expenditure decrease. Return of unspent funds to Infrastructure Charges Reserve. Funds held in Reserve for Scouts Association outcomes in the Gold Coast and relate to a developer contribution received in 2006 as part of the “Avalon” development in Surfers Paradise. Building Improvements Capital 500,000 Additional funds are required for the final payment for the air conditioning replacement at Waterside buildings as a result of anticipated grant funding not being successful. Including this $500,000 request for funds, the final project cost is $2,300,300.

City Transport Improvement Separate Charge (225,000) Higher than anticipated revenue due to increased number of rateable properties. There is a corresponding transfer to reserves noted in this table. Debt Recovery - Rates 1,000,000 (1,335,000) $1,335,000 Expenditure decrease Delays have been experienced with commencing the advanced recovery activity for rate debt as a result of conflicting priorities with the Pathway system. These delays result in lower than expected expenditure being incurred this financial year.

$1,000,000 Revenue decrease The expenditure associated with advanced rate recovery activity is significantly lower than expected due to a delayed start to this process. As the amount of revenue is directly related to the expenditure incurred, the revenue will also be lower than expected. Bank Fees & Charges 360,000 $120,000 Expenditure decrease There has been a lower than expected number of payments made to Australia Post in relation to Council accounts.

$480,000 Expenditure increase The Commonwealth Bank implemented changes to the interchange hierarchy which determines the interchange fees charged by the credit card schemes (Visa/Mastercard). The changes significantly increased the fees payable by Council, and the scope of the increase was not fully recognised in time for the 2018-19 budget. An increase in the surcharge fee is proposed to commence from 1 July 2019 as part of the 2019- 20 budget process.

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Table 2: March 2019 Budget Review Significant Variations Revenue Expenditure $ $ () = Fav () = Fav Customer Contact - Operations (200,000) Property search fee revenue has increased due to an increasing trend in search requests.

Property Transfer Fees (147,000) An increasing trend in search requests assumes there will be an increase in property sales and consequently, an increase in property transfer fee revenue.

Traineeship Program - State (260,000) 260,000 $260,000 Revenue increase and $260,000 expenditure increase. Skilling Queenslanders for Work is a continuing Queensland Government program that attracts subsidies to the City for employing people from the target group - school leavers and other young people, Aboriginal and Torres Strait people, people with disability, women re-entering the workforce and veterans and ex service personnel. The City can apply for subsidies of up to $26,000 per trainee with a contribution of $4,000 from the business to engage a trainee for a six month period. The state provides $15,000 through its First Start initiative alongside the Australian Government subsidy of $11,000 (Work Start $10,000 and PaTH $1000). Respective directorates/branches will contribute $4,000 per individual engaged from existing budgets together with other minor costs of engaging the individuals e.g. PPE.

To maximise benefits to the City, it is anticipated that twenty (20) traineeship positions can be created for the City to manage multiple cohorts of trainees over the life of the program which, at this stage, ends in 2021.

For 2019-20, revenue of $260,000 for government subsidies will be offset by $260,000 expenses associated with trainee wages. Other costs will be borne by the directorate.

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ITEM 5 (Continued) MARCH 2019 BUDGET REVIEW FN334/375/20(P1)

Table 2: March 2019 Budget Review Significant Variations Revenue Expenditure $ $ () = Fav () = Fav Online Timesheeting (722,000) 722,000 $722,000 Expenditure increase & $722,000 revenue increase. A project is currently underway to implement an online time- sheeting solution (TA21) which will be integrated with our existing payroll software provided by Frontier. This additional module will attract an annual maintenance fee of $54,000. Implementation is scheduled to commence in late 2019/early 2020. It is expected that these costs will be offset by savings across Council as we transition from a paper-based process to an online solution, with the financial benefits commencing in July 2021.

An initial funding allocation of $144,000 was approved in the September 2018 budget review (G19.1030.014). The total estimated cost of the project is $1,609,654 to be fully funded from the Investment Fund Reserve, with repayment via bankable benefits over an estimated 8 year period.

Transport & Infrastructure Road Rehab & Reseals (318,694) Project savings have been realised in the Reseal and Rehabilitation Program for 2018-19. Rather than bring forward other projects within this program the budget is being allocated to the Road Reconstruction project at Pearson Road, Yatala to satisfy conditions associated with the Federal grant that has been secured for this project.

Road Reconstruction 318,694 Funding is required for project commencement of Pearson Road early works. A condition of the Federal Government Grant funding is that construction of the project commence prior to 30 June 2019.

Traffic Administration (200,000) Increase in Temporary Road Closure revenue to recognise the continued volume of road closure applications to the end of the financial year.

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Table 2: March 2019 Budget Review Significant Variations Revenue Expenditure $ $ () = Fav () = Fav Internal Sales Waste Management 2,500,000 $2,500,000 Expenditure increase. Increase in Internal Tipping fees relating to the City’s Capital and Operating Works Programs. A corresponding increase in revenue is reflected in Water & Waste resulting in a net transfer to Waste Reserves. The increase in tipping fees can be attributed to an increase in waste and a delay in the outsourcing of construction waste.

Transport & Infrastructure outlay approximately $7.3m in tipping fees per annum, of which $5.7m relates to construction waste. The outsourcing of construction waste (commencing late April 2019) will result in estimated savings of $3.85m per annum, with the added benefit that approximately 85% of the waste will be made available for alternate uses. The savings will offset the waste management levy, estimated to cost $1.99m per annum from 1 July 2019.

Cultural Precinct Delivery 24,308,479 (24,308,479) ($24,308,479) Revenue decrease and $24,308,479 expenditure decrease. As a result of finalisation of the Stage 2 (construction) contract of the Art Gallery, a revised cash flow has been provided by the managing contractor and therefore excess current year funding has been returned to the Cultural Precinct Reserve. Green Bridge cash flow also updated, with a corresponding Investment Fund Reserve adjustment. No change to completion date to either project.

Parking Operations (540,500) 270,250 ($540,500) Revenue increase and $270,250 expenditure increase. Recognise increase in revenue and expense representing reinvestment of Park in Centre Scheme (PICS) pilot parking meter revenue for Broadbeach $115,500 (Division 10) and Burleigh Heads $425,000 (Division 12). This is in accordance with Key Action 11 of the 2015 City Parking Plan.

Light Rail Stage 3 0 An additional temporary position, Business Engagement Officer, is requested to be added to the Gold Coast Light Rail team for the period from 1 May 2019 to 30 June 2022 to focus on business readiness and engagement for Stage 3 and has been funded within the existing budget allocation.

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Table 2: March 2019 Budget Review Significant Variations Revenue Expenditure $ $ () = Fav () = Fav Restoration Essential Public Assets (REPA) - Roads (59,549) 225,540 ($59,549) Revenue Increase and $225,540 Expenditure Increase. REPA works related to Syndicate Road Tallebudgera, and Stanmore Road Luscombe and Queensland Reconstruction Authority (QRA) revenue recognition for Syndicate Road Tallebudgera. These amounts are balanced against other savings within Transport & Infrastructure. REPA works - Bridges (835,830) 1,490,171 ($835,830) Revenue Increase and $1,490,171 Expenditure Increase QRA revenue recognition and REPA works related to Alan Wilkie Bridge and REPA works related to Tallebudgera Creek Bridges # 2 and # 3. Bridges were replaced consistent with City standards, whilst QRA guidelines reimburse to a lower standard, hence the difference between income and expenditure. These amounts are balanced against other savings within Transport & Infrastructure.

Emergent Works (243,718) QRA revenue recognition for REPA Fire Trails. These works were completed in 2017-18 but the acquittal wasn’t agreed by the State until current year.

Water and Waste Gold Coast Water and Waste movements net to nil impact on 6,313,780 (5,705,329) the budget. Please refer to separate reports to view the details of their budget review adjustments. The net amount shown here of $608,451 relates to Tax Equivalent adjustments in the March Budget Review, which are detailed further in Table 1

Other General Review Variations (including Water, Waste (1,578,801) 1,809,476 and Tourist Parks) Budget (Surplus)/Deficit (361,269)

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5.3 Review of Overall Budget Position

Table 3 provides a summary of the spending and funding proposals by directorate for the March 2019 Budget Review.

Operating revenue has increased by $2.2 million due to bad debts recovered, $1.0 million and an increase in insurance claim monies received, $1.0 million as discussed elsewhere in this report.

Operating expenditure budgets have increased by $1.0 million overall with a number of budget review increases and decreases contributing to this small overall increase, including $0.75 million for Griffith University Research funding.

Capital revenues have increased by $1.9 million largely due to grant funding received for repairs to transport infrastructure $1.1 million.

Capital expenditure has decreased by $28.6 million overall which is due mainly to a timing adjustment for the Cultural Precinct $24.3 million discussed earlier in this report. There was also a $5 million reduction in Water and Waste capital projects.

Funding available from loans has decreased by $2.6 million resulting from the reduction in QTC debt for Waste Landfill Projects $1.5 million and for Tourist Parks $1.0 million mentioned elsewhere in this report.

The total favourable net change in revenues and expenditures totalling $29.1 million is offset by net transfers from reserves of $28.7 million.

The total projected budget position after the December review is $18.7 million, which is in line with the end of year review adopted by Council.

The $18.4 million has been set aside from the end of year surpluses for 2017-18 from rates that were prepaid. The expected surplus will be used to offset a potential general rates budget shortfall due to the amount of rates that were paid early combined with a potential change in the accounting standards on the timing of rates revenue recognition.

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ITEM 5 (Continued) MARCH 2019 BUDGET REVIEW FN334/375/20(P1)

Table 3 Budget Review Summary

Budget Review Summary for 2018-19 Profit and Loss Items Capital Funding Items (Excl Depn and Contributed Assets) Operating Capital Operating Capital Net Debt Net Reserves Surplus Balance 2018-19 Revenue Revenue Expenses Expenditure (incr)/decr incr/(decr) Budget ($000s) ($000s) ($000s) ($000s) ($000s) ($000s) ($000s) ($000s)

2018-19 Initial Budget (1,303,214) (120,661) 1,031,653 401,093 14,845 2,962 (26,679) 0

2017-18 End of Year position and Reprovisions 5,298 (14,415) 43,486 80,874 (6,364) 17,122 (144,353) (18,352)

2018-19 September Review (831) 1,115 (161) 17,884 (743) (17,265) 0 (0)

Current Revised Budget (1,302,905) (135,618) 1,079,661 518,135 8,253 (14,847) (171,032) (18,352)

2018-19 Proposed March Review

Transport & Infrastructure (1,065) (1,540) 2,770 (21,973) 0 24,308 0 2,500

Lifestyle & Community (453) (278) (935) (1,029) 0 2,001 0 (693)

Waste Management 604 0 (2,526) (2,122) 1,540 2,504 0 0

Tourist Parks 398 0 287 (1,046) 1,396 (1,035) 0 0

Water and Sewerage Services (871) 98 (536) (2,888) 0 4,197 0 0

Office of the CEO/COO (1,867) (112) 850 827 (350) (1,402) 0 (2,054)

Organisational Services (137) (96) 725 1,058 0 (1,917) 0 (367)

Economy, Planning and Environment 1,187 0 378 (1,383) 0 71 0 253

March Review Total (2,204) (1,928) 1,013 (28,557) 2,586 28,728 0 (361)

2018-19 Proposed Revised Budget (1,305,109) (137,546) 1,080,674 489,578 10,840 13,882 (171,032) (18,713)

773rd Council Meeting 14 May 2019 115 Special Budget & Finance Committee Meeting 13 May 2019 Adopted Report

ITEM 5 (CONTINUED) MARCH 2019 BUDGET REVIEW FN334/375/20(P1)

5.4 Recurrent Budget Impact - March 2019 Budget Review

Council’s budget and subsequent variations are submitted under the status of either recurrent or non-recurrent with the recurrent variations representing the flow on to future years. The table below highlights the net recurrent variance submitted in each quarterly review and the accumulated flow on effects to future years.

The major recurrent operating variations submitted in the March 2019 Budget Review are listed below and in total reflect an unfavourable variance of $1,262,040.

Table 4

Summary of Net Recurrent Impact

Summary of Budget Review 2018-19 Net Recurrent (Fav)/ Un-fav $ September Review 2018 (1,515,284) December Review 2018 484,890 March Review 2019 1,262,040

Progressive Recurrent Variance 2018-19 231,646

(Fav) / Unfav Recurrent Items - December 2018 Review $

Landfill Operations - introduction of more stringent stormwater discharge quality 1,165,000 criteria Cemetery revenue decrease 115,000

All Other Net Recurrent Variations (17,960)

Total 1,262,040

773rd Council Meeting 14 May 2019 116 Special Budget & Finance Committee Meeting 13 May 2019 Adopted Report

ITEM 5 (Continued) MARCH 2019 BUDGET REVIEW FN334/375/20(P1)

5.5 Reserve Balances

Council maintains a number of cash reserves which hold funds for various purposes. The following table provides the balance of each reserve and the movements contained in the March 2019 Budget Review. City of Gold Coast – Reserves – 2018-19 Table 5 Proposed Reserve Transfers and Balances

RESERVE December 2018 March 2018 Proposed

Review Review Closing Balance Closing Balance Movement 30-6-2019 $ $ $ Capital Projects Reserve Centre Improvement Program Reserve 572,205 185,770 757,975 City Transport Improvement Reserve 0 225,000 225,000 Cultural Precinct Reserve 20,763,565 12,985,668 33,749,233 Economic Investment Reserve 1,035,000 (838,500) 196,500 Fleet & Plant Renewal and Purchase Reserve 14,875,000 (1,200,000) 13,675,000 Infrastructure Charges Reimbursement Reserve 520,000 0 520,000 Koala Habitat Acquisition and Enhancement Reserve 1,000 700,000 701,000 Open Space Reserve 1,215,576 98,775 1,314,351 Parks & Recreation Reserve 1,725,094 50,000 1,775,094 Property Rationalisation Reserve 1,104,540 0 1,104,540 Roadworks Acquisition Reserve 95,000 0 95,000 Safety Camera and Communication Network Reserve 349,997 0 349,997 Strategic Priorities Reserve 14,284,437 0 14,284,437 Tourist Park Reserve 1,494,705 (684,754) 809,951 Waste Management Reserve 35,835,128 2,503,938 38,339,066 Water and Sewerage Infrastructure Reserve 189,879,849 86,883 189,966,732

Total Capital Reserves 283,751,096 14,112,780 297,863,876 Self Insurance Reserve Insurance Liability Reserve 289,110 0 289,110 Workers Compensation Reserve 11,449,000 (400,000) 11,049,000

Total Insurance Reserves 11,738,110 (400,000) 11,338,110 Operating Reserve Coomera River Dredging Contribution Reserve 3,473,815 0 3,473,815 Events Reserve 2,428,250 (530,000) 1,898,250 Gold Coast Investment Fund Reserve 73,484,311 9,428,911 82,913,222 Hope Island Channel Reserve 1,035,818 0 1,035,818 Northern Beaches Sand Nourishment Reserve 2,220 0 2,220

Total Operating Reserves 80,424,414 8,898,911 89,323,325

Total Capital & Operating Reserves 375,913,620 22,611,691 398,525,311

Infrastructure Charges Reserve Infrastructure Charges Reserve (forecast balances) 395,966,771 6,116,493 402,083,264

Total Infrastructure Charges Reserve 395,966,771 6,116,493 402,083,264

Total Reserves (Capital/Operating/ICR) 771,880,391 28,728,184 800,608,575

773rd Council Meeting 14 May 2019 117 Special Budget & Finance Committee Meeting 13 May 2019 Adopted Report

ITEM 5 (Continued) MARCH 2019 BUDGET REVIEW FN334/375/20(P1)

Strategic Priorities Reserve

The Strategic Priorities Reserve is to fund strategic projects subject to specific determination by Council. The following table identifies the current balances of the Strategic Priorities Reserve.

Table 6 Strategic Priorities Reserve

Allocation Balance Funds Allocated to Projects 2018-19 Future Budget $ Budgets $

Contribution towards Light Rail Stage 2 18,000,000 0 Funding towards Cultural Precinct Bridge & Other Public Access 5,001,069 0 Funding for Special Purposes 373,625 7,442 Future planning associated with Tourist Parks 1,000,000 0 Dive Site Tourist Attraction 4,800,000 Point Danger Public convenience 309,000 Coomera Hub 1,376,075 Pimpama Sports Hub 6,811,220 Miami Aquatic Centre Redevelopment 980,700

Total 24,374,694 14,284,437

6 ALIGNMENT TO THE CORPORATE PLAN, CORPORATE STRATEGIES AND OPERATIONAL PLAN

The March 2019 Budget Review will address multiple corporate objectives within Council’s Operational Plan and Corporate Plan including;

Corporate Governance, Organisational Capability and Customer Key Focus Area Contact

Key Focus Area Delivering effective corporate governance Outcome

773rd Council Meeting 14 May 2019 118 Special Budget & Finance Committee Meeting 13 May 2019 Adopted Report

ITEM 5 (Continued) MARCH 2019 BUDGET REVIEW FN334/375/20(P1)

7 FUNDING AND RESOURCING REQUIREMENTS

Not Applicable.

8 RISK MANAGEMENT

The following risk assessment applies to this report:

Risk Number Description

Risk No. CO000431 Non-compliance with State and Commonwealth legislation leading to potential prosecution of Council, executive officer liability and negative city image.

Risk No. CO000433 Qualified audit leading to Council’s reputation being damaged.

Risk No. CO000435 Failure to achieve a sustainable long term financial position leading to negative impacts on Council’s ability to deliver on its key focus area commitments.

9 STATUTORY MATTERS

The March 2019 Budget Review report is presented to Council in accordance with the Local Government Act 2009 and Local Government Regulation 2012 with particular reference to the following;

Local Government Act 2009 Chapter 4 - Part 3 - Financial Planning and Accountability Section 101 Statutory Bodies Financial Arrangements Act Applies to Local Governments Section 102- Financial Sustainability Criteria Section 103 - Financial Management Systems Section 104 - Financial Management, Planning and Accountability Documents

773rd Council Meeting 14 May 2019 119 Special Budget & Finance Committee Meeting 13 May 2019 Adopted Report

ITEM 5 (Continued) MARCH 2019 BUDGET REVIEW FN334/375/20(P1)

Local Government Regulation 2012 Chapter 5 – Financial Planning and Accountability Part 2 - Financial Planning Documents S169 - Preparation and Content of Budget S170 - Adoption and amendment of budget

S173 – Unauthorised Spending Part 4 – Financial Policies Part 9 – Accounting Records S203 – Accounting records for funds generally

10 COUNCIL POLICIES

The March 2019 Budget Review has been conducted in accordance with Council’s Budget Review Policy and Guidelines as adopted by Council 7 November 2017 (Ex Minute G17.0428.014).

11 DELEGATIONS

Not Applicable.

12 COORDINATION & CONSULTATION

The March 2019 Budget Review has been compiled in consultation with the following:

Name and Title of the Directorate or Is the Stakeholder Satisfied Stakeholder Consulted Organisation With Content of Report and Recommendations (Yes/No) (comment as appropriate) Mayor City of Gold Coast Yes All Directors City of Gold Coast Yes All Directorate Finance Officers Office of COO Yes Manager Corporate Finance Office of COO Yes

13 STAKEHOLDER IMPACTS

Not Applicable.

773rd Council Meeting 14 May 2019 120 Special Budget & Finance Committee Meeting 13 May 2019 Adopted Report

ITEM 5 (Continued) MARCH 2019 BUDGET REVIEW FN334/375/20(P1)

14 TIMING

The budget variations contained in the March 2019 Budget Review are effective from the date of the Council resolution expenditure and represent anticipated expenditure and revenue estimates to 30 June 2019.

15 CONCLUSION

The March Budget Review details a Net Surplus of $361,269 which is proposed to be allocated towards the end of year surplus of $21.5 million proposed to underpin the 2019-20 budget in accordance with the ten year financial forecast.

773rd Council Meeting 14 May 2019 121 Special Budget & Finance Committee Meeting 13 May 2019 Adopted Report

ITEM 5 (Continued) MARCH 2019 BUDGET REVIEW FN334/375/20(P1)

16 RECOMMENDATION

It is recommended that Council resolves as follows: 1 That the report/attachments be deemed non-confidential except for those parts deemed by the Chief Executive Officer to remain confidential in accordance with sections 171 (3) and 200 (5) of the Local Government Act 2009. 2 That Council adopt the March 2019 Budget Review adjustments presented in this report and Attachment 1, resulting in a surplus of $361,269. 3 That Council allocate the surplus of $361,269 towards the end of year surplus. 4 That Council approve and adopt the following reserve transfers: a $185,770 to the Centre Improvement Program Reserve; b $225,000 to the City Transport Improvement Reserve; c $12,985,668 to the Cultural Precinct Reserve; d $838,500 from the Economic Investment Reserve; e $1,200,000 from the Fleet & Plant Renewal and Purchase Reserve; f $700,000 to the Koala Habitat Acquisition and Enhancement Reserve; g $98,775 to the Open Space Reserve; h $50,000 to the Parks & Recreation Reserve; i $684,754 from the Tourist Parks Reserve; j $2,503,938 to the Waste Management Reserve; k $86,883 from the Water and Sewerage Infrastructure Reserve; l $400,000 from the Workers Compensation Reserve; m $530,000 from the Events Reserve; n $9,428,911 to the Gold Coast Investment Fund Reserve; o $6,116,493 from the Infrastructure Charges Reserve;

Author: Authorised by: Joe McCabe Dale Dickson Chief Operating Officer Chief Executive Officer TRACKS REF: 73172079

773rd Council Meeting 14 May 2019 122 Special Budget & Finance Committee Meeting 13 May 2019 Adopted Report

ITEM 5 (Continued) MARCH 2019 BUDGET REVIEW FN334/375/20(P1)

COMMITTEE RECOMMENDATION SBF19.0513.005 moved Cr Tate seconded Cr Caldwell

1 That the report/attachments be deemed non-confidential except for those parts deemed by the Chief Executive Officer to remain confidential in accordance with sections 171 (3) and 200 (5) of the Local Government Act 2009. 2 That Council adopt the March 2019 Budget Review adjustments presented in this report and Attachment 1, resulting in a surplus of $361,269. 3 That Council allocate the surplus of $361,269 towards the end of year surplus. 4 That Council approve and adopt the following reserve transfers: a $185,770 to the Centre Improvement Program Reserve; b $225,000 to the City Transport Improvement Reserve; c $12,985,668 to the Cultural Precinct Reserve; d $838,500 from the Economic Investment Reserve; e $1,200,000 from the Fleet & Plant Renewal and Purchase Reserve; f $700,000 to the Koala Habitat Acquisition and Enhancement Reserve; g $98,775 to the Open Space Reserve; h $50,000 to the Parks & Recreation Reserve; i $684,754 from the Tourist Parks Reserve; j $2,503,938 to the Waste Management Reserve; k $86,883 from the Water and Sewerage Infrastructure Reserve; l $400,000 from the Workers Compensation Reserve; m $530,000 from the Events Reserve; n $9,428,911 to the Gold Coast Investment Fund Reserve; o $6,116,493 from the Infrastructure Charges Reserve;

CARRIED UNANIMOUSLY

773rd Council Meeting 14 May 2019 123 Special Budget & Finance Committee Meeting 13 May 2019 Adopted Report

ITEM 5 (Continued) MARCH 2019 BUDGET REVIEW FN334/375/20(P1)

Please refer to Attachment – March 2019 Budget Review

Attachment 1 Page 124

PB_020 Directors Report - March 2019 Budget Review

Directorate: Economy, Planning & Environment

Recurrent Non-Recurrent Total Review Review Review (Fav)/Unfav (Fav)/Unfav (Fav)/Unfav Expenses 0 (1,320,410) (1,320,410) Revenue 0 1,573,410 1,573,410 Net Directorate Variations 0 253,000 253,000

Budget Review Categories Directorate Variations Recurrent Non-Recurrent Total Review Review Review (Fav)/Unfav (Fav)/Unfav (Fav)/Unfav General Review - Mar 19 0 211,000 211,000 Intra Directorate - Mar 19 0 0 0 Net Directorate Variations 0 211,000 211,000

Inter-Directorate Variations (Balanced between Directorates) Inter Directorate - Mar 19 0 42,000 42,000 Total Net Directorate Variations 0 253,000 253,000

Directorate Variations - Comments on Major Variations Legal Recoupments - Favourable $300,000: Budget allocation has been included to provide for recoupment of legals costs within the Planning and Development area where costs are recovered from applicants for some costs incurred by the City.

International Trade and Investment Program (ITIP) - Favourable $100,000: The originally endorsed ITIP Program included funding for the delivery of a VIP Program within Gold Coast Business Week. Since that time, Gold Coast Business Week has refined into a local focused program which will no longer incorporate a VIP Program. Accordingly, this funding has been identified as savings as part of this review.

Grant Funding (Growth Projections Framework and Methodology) - Favourable $100,000 / Unfavourable $100,000: The City was successful in securing State Government grant funding to assist defray the costs of developing a Growth Projections Framework and Methodology. Total funding approved is $150,000 with $100,000 expected to be received during 2018-19. Remaining funding is expected to be received in 2019-20. Expenditure allocation has also been included within this review to undertake this body of work.

Grant Funding (Planning Act reforms) - Favourable $30,000: The City was successful in securing funding from the Department of Housing, Local Government & Planning to assist defray the costs of implementing reforms required as a result of the implementation of the new Planning Act. Expenditure related to this item was incurred during 2017-18 and grant funding was not received until this financial year.

Digital City Revenue - Unfavourable $1,479,500: The initial adopted budget included an estimate of $1,850,000 in revenue to be received in relation to Digital City offerings, which had been based on potential uptake at that point in time. Subsequently, the key potential customer sought a significant “volume discount” which was not acceptable to the City and, if accepted, would have been materially detrimental to the future value of the network.

At this review a total reduction in this revenue item of $1,479,500 is being recorded, with revenue expected to be received in 2018-19 now estimated at $370,500, with an expected ‘harvest’ of a further $641,000 from the 2018-19 capital allocation for Microwave Refresh.

An independent review of the business case for extension of the optic fibre network was approved by Council (Resolution # G18.1207.014) and is nearing completion. Preliminary findings indicate that the previously forecast funds for harvesting, as approved by Council, are realisable and will be sufficient to underpin future debt servicing requirements for the City’s investment.

PB_020 BudgetDelays Review have been- Directors experienced Report with the project, particularly dueCity to ofissues Gold Coast-IN-CONFIDENCEaround 5G, including the Federal Page : 1 of 23 Government’s ruling to ban Huawei equipment from 5G (impactingReport all carriersprinted asin Australia)at 02-05-2019 and structural About this Report changes in the industry. Market interest in the City’s program remains strong and there is a high level of confidence that deal will proceed in late 2019 as 5G implications are resolved. Legal Recoupments - Favourable $300,000: Budget allocation has been included to provide for recoupment of legals costs within the Planning and Development area where costs are recovered from applicants for some costs incurred by the City.

International Trade and Investment Program (ITIP) - Favourable $100,000: The originally endorsed ITIP Program included funding for the delivery of a VIP Program within Gold Coast Business Week. Since that time, Gold Coast Business Week has refined into a local focused program which will no longer incorporate a VIP Program. Accordingly, this funding has been identified as savings as part of this review.

Grant Funding (Growth Projections Framework and Methodology) - Favourable $100,000 / Unfavourable $100,000: The City was successful in securing State Government grant funding to assist defray the costs of developing a Growth Projections Framework and Methodology. Total funding approved is $150,000 with $100,000 expected to be received during 2018-19. Remaining funding is expected to be received in 2019-20. Expenditure allocation has also been included within this review to undertake this body of work.

Grant Funding (Planning Act reforms) - Favourable $30,000: The City was successful in securing funding from the Department of Housing, Local Government & Planning to assist defray the costs of implementing reforms required as a result of the implementation of the new Planning Act. Expenditure related to this item was incurred during 2017-18 and grant funding was not received until this financial year.

Digital City Revenue - Unfavourable $1,479,500: The initial adopted budget included an estimate of $1,850,000 in revenue to be received in relation to Digital City offerings, which had been based on potential uptake at that point in time. Subsequently, the key potential customer sought a significant “volume discount” which was not acceptable to the City and, if accepted, would have been materially detrimental to the future value of the network.

At this review a total reduction in this revenue item of $1,479,500 is being recorded, with revenue expected Attachment 1 to be received in 2018-19 now estimated at $370,500, with an expected ‘harvest’ of a further $641,000 from Page 125 the 2018-19 capital allocation for Microwave Refresh.

An independent review of the business case for extension of the optic fibre network was approved by Council (Resolution # G18.1207.014) and is nearing completion. Preliminary findings indicate that the PB_020previously Directors forecast funds for Reportharvesting, as - approved March by Council, 2019 are Budget realisable and Review will be sufficient to underpin future debt servicing requirements for the City’s investment.

Delays have been experienced with the project, particularly due to issues around 5G, including the Federal Government’s ruling to ban Huawei equipment from 5G (impacting all carriers in Australia) and structural changes in the industry. Market interest in the City’s program remains strong and there is a high level of confidence that deal will proceed in late 2019 as 5G implications are resolved.

Future Budget Trends

Director of Economy, Planning & Environment - Alisha Swain DATE

PB_020 Budget Review - Directors Report City of Gold Coast-IN-CONFIDENCE Page : 2 of 23 Report printed as at 02-05-2019 About this Report Attachment 1 Page 126

PB_020 Directors Report - March 2019 Budget Review

Directorate: Lifestyle & Community

Recurrent Non-Recurrent Total Review Review Review (Fav)/Unfav (Fav)/Unfav (Fav)/Unfav Expenses 113,210 (3,521,101) (3,407,891) Revenue (406,170) 3,121,019 2,714,849 Net Directorate Variations (292,960) (400,082) (693,042)

Budget Review Categories Directorate Variations Recurrent Non-Recurrent Total Review Review Review (Fav)/Unfav (Fav)/Unfav (Fav)/Unfav General Review - Mar 19 (292,960) (1,379,527) (1,672,487) Net Directorate Variations (292,960) (1,379,527) (1,672,487)

Inter-Directorate Variations (Balanced between Directorates) Inter Directorate - Mar 19 0 979,445 979,445 Total Net Directorate Variations (292,960) (400,082) (693,042)

Directorate Variations - Comments on Major Variations Significant variations included in the Lifestyle & Community Directorate review are noted below.

PARKS & RECREATIONAL SERVICES

There are a number of significant variations in the Parks & Recreational Services maintenance budgets resulting in an overall favourable operating variation of $206,650 which includes: - Savings of $620,000 in the grass cutting budget as a result of 1 less mowing rotation this year attributed to a combination of low rainfall and high temperatures. - Weather conditions have also resulted in additional water charges of $255,000 with significantly increased irrigation required to protect important green assets such as playing surfaces. Queensland has experienced the 5th warmest year on record and rainfall for the year ended 31 Jan 2019 was 340mm below average. - Additional costs of $760,000 have been incurred for parks tree works as a result of significant weather events in December 2018. Parks and Landscape Maintenance responded to 753 requests for service as a direct result of the storms, with 72 emergency call-outs after hours. More than one third of the requests came from the suburbs of Robina, Mudgeeraba, and Varsity relating to uprooted and damaged trees, along with the clean-up of tree debris strewn across roads and our Parks. The actual clean-up took 6 weeks in the worst affected areas. - Budget reduction of $381,450 for the operations and maintenance of the Village Heart precinct given the residential and commercial occupancy of the area is developing more slowly than forecast and some assets were delayed in being accepted by the City, such as the water feature. - Allocation of funding of $300,000 to cover the cost of maintaining the Helensvale Golf Course. Recent attempts to attract an operator have been progressed and Council will need to consider its options for the site. A report is being prepared for Council. In the interim there is a need to continue to undertake basic maintenance and continue a level of security at the site. - Savings of $230,000 in the HOTA facilities maintenance budget as a result of a number of rectifications being dealt with through contract defect liability conditions, reducing the reliance on the landscape budget. In addition, areas of the site that are cordoned off for construction have resulted in less reliance on maintenance budgets.

Significant Capital Works Variations

Equestrian Facilities $1,125,000 (Expenditure Decrease) Council previously resolved to retain funds for future equestrian facilities in response to needs triggered by the erosion at Charlie's Crossing. Various investigations are continuing and officers are reviewing reports on modelling by TMR associated with the John Muntz bridge which influences the future response to erosion at Charlie's Crossing. An allocation of $50,000 will be retained for works this financial year, with the remainder of funding returned to Council in this budget review, with future funding subject to further consideration by Council.

PB_020 BudgetGainsborough Review - DirectorsGreens $1,820,000Report Expenditure Decrease, RevenueCity of Decrease, Gold Coast-IN-CONFIDENCE net nil. Page : 3 of 23 This budget adjustment reflects that in 2017-18 there was the recognition of $4M in infrastructure charges credits for sports field works. Whilst that was recognised, worksReport under printedthe Infrastructure as at 02-05-2019 Agreement (IA) haveAbout this Report just now been completed. As such the budget in 2018-19 should not have duplicated the IA allocation and this review reflects that correction. There is no impact on Council’s overall budget.

COMMUNITY VENUES & SERVICES

Aquatic Centres:

Gold Coast Aquatic Centre - There is an anticipated shortfall in revenue of $240,000 at this centre as a result of a slower than forecast uptake of memberships and programs following reopening of the facility after almost six months closure for GC2018.

Palm Beach Pool - Patronage numbers at this centre have exceeded original forecasts, and that of the former operator, resulting in increased revenue predictions of $290,000 this financial year. The increased patronage as well as increased program offerings has driven increased operating and labour costs including additional resourcing for lifeguards and gym programs. The additional expenditure is forecast at approximately $286,000 resulting in an approximate net nil impact in this review.

Miami Pool - Cost savings of $210,000 due to tighter control over contracts and reduction in operations and maintenance costs as the facility prepares for major redevelopment in late 2019.

Major Sporting Venues: Gold Coast Sports & Leisure Centre: $127,960 Revenue Decrease, $340,000 Expenditure Increase - Revenue forecast will not meet budget due to limited event business throughout December and last week of January, and quieter than anticipated business levels in January and February. This has had a flow through effect on food and beverage sales. - The nature of operations of this venue pre and post Games has presented difficulties in accurately forecasting venue usage and related costs. Operations are beginning to normalise but increased costs this financial year relate to increased security ($75,000), unbudgeted costs for IT and telecommunications ($25,000), additional operational and event based costs of $81,500, higher than forecast costs for servicing and maintenance of air conditioning and the building energy management system ($22,800), increased food and beverage cost of sales of $115,000, additional casual labour associated with events and catering of $35,000, partially offset by savings in electricity and cleaning services contract ($52,000).

TOURIST PARKS:

Overall reduction in operating profit of $728,809 as a result of lower than budgeted revenue predictions ($397,919) and increased operational and maintenance costs of $330,890. Heavy discounting from other accommodation providers has impacted on the ability to achieve high occupancy together with high room rates, predominantly in the Main Beach and Broadwater Tourist Parks. Additional costs have been incurred at Tallebudgera and Broadwater Tourist Parks from increased reactive maintenance due to the ageing of the asset base and as a result of unplanned electrical testing. The unfavourable result has been significantly offset by a reduction in the Transfer to the Tourist Park Reserve of $684,754. More detailed justification has been provided in the separate agenda for Gold Coast Tourist Parks March 2019 Budget Review.

Capital Works - $1,411,927 Program and Loan Funding Reduction - net nil

The 2018-19 capital program was prepared in late 2017 ahead of the Council endorsement of the Gold Coast Tourist Parks’ vision and strategy. The strategy outlines the need for significant improvement and redevelopment of the current aged facilities to ensure they are befitting of the Caravan and Camping Industry which is a $19 billion industry and has grown year on year for the past 6 years. A new Infrastructure Investment Plan is currently being developed and all current renewal work has been assessed on a case by case basis to ensure that funds are not expended on facilities that will be replaced in the Investment Plan. As such, a number of projects have been removed from the current program to ensure that future funds and opportunity are available for the Investment Plan. Project variations have been detailed in the separate agenda item.

Kirra Beach Tourist Park Manufactured Home Acquisition - $350,000 Expenditure Increase, $350,000 Transfer from Reserve A Kirra Beach Tourist Park manufactured home resident (site 154), has lodged an Expression of Interest to sell to Council - Special Circumstances for consideration. The special circumstances of the owner is supported by medical reports and is recommended to approve this request. The valuation of site 154 was completed in August 2018 by Taylor Byrne who have advised that, in their opinion, the market value of this property is $350,000. This acquisition is proposed to be funded by general borrowings (drawn back through the Tourist Park Reserve).

HEALTH REGULATORY & LIFEGUARD SERVICES:

City Parking - $605,624 Revenue Increase, $554,764 Expenditure Decrease - Revenue increase of $963,080 from bad debts recovered from infringements that were previously written off and an increase in the number of infringement fines resulting in additional revenue of $85,000 - A decrease in the number of penalty infringements issued to SPER, and subsequently recovered, has resulted in a revenue and corresponding expenditure reduction of $458,000 (net nil) - Expenditure savings of $96,764 have been realised from a reduction in legal fees in addition to reduced expenditure on various materials and services budgets such as staff uniforms, cleaning, printing, equipment and supplies.

Pest Management Capital - $250,000 Expenditure Increase Update from outdated Access 2003 database to manage service requests, work flows, mosquito sampling, surveillance and treatment data. New system will provide flexibility and mobile device support. The system generates property based (GIS) and mobile platform based (currently paper based) work flows.

Pest Management Operational Costs - $250,000 Expenditure Decrease Savings of $100,000 have been realised this financial year from a reduction in aerial treatment programs from seven to five. Seven treatments were budgeted for given the number and height of the predicted tides. The lower than expected number of aerial treatments conducted so far this season is a result of tidal inundations not occurring as predicted. Aerial treatments are necessary when tidal inundation of salt marsh breeding areas occurs. Tide heights in excess of 1.60m at the Gold Coast Seaway flood the marshes triggering mosquito larval emergence. On 2 occasions the predicted tides failed to reach predicted heights and therefore treatments were not necessary. Labour savings of $150,000 have resulted from extended long service leave absence that has not been backfilled.

Environmental Health & City Law Operations Revenue Decrease net $365,840 Revenue decrease due to the number of PINs and prosecutions being down, this is primarily due to less litter and environmental offences being detected. Many regulated activities were also brought into high levels of compliance in preparation for the Commonwealth Games.

Animal Management $251,655 Expenditure Decrease Savings have been realised in the labour budget this year as not all funds reprovided from 2017-18 to progress the Service Delivery Review implementation have been required. In addition, position vacancies, and staff leave due to long term city cover claim have resulted in reduced labour costs this financial year. Significant variations included in the Lifestyle & Community Directorate review are noted below.

PARKS & RECREATIONAL SERVICES

There are a number of significant variations in the Parks & Recreational Services maintenance budgets resulting in an overall favourable operating variation of $206,650 which includes: - Savings of $620,000 in the grass cutting budget as a result of 1 less mowing rotation this year attributed to a combination of low rainfall and high temperatures. - Weather conditions have also resulted in additional water charges of $255,000 with significantly increased irrigation required to protect important green assets such as playing surfaces. Queensland has experienced the 5th warmest year on record and rainfall for the year ended 31 Jan 2019 was 340mm below average. - Additional costs of $760,000 have been incurred for parks tree works as a result of significant weather events in December 2018. Parks and Landscape Maintenance responded to 753 requests for service as a direct result of the storms, with 72 emergency call-outs after hours. More than one third of the requests came from the suburbs of Robina, Mudgeeraba, and Varsity relating to uprooted and damaged trees, along with the clean-up of tree debris strewn across roads and our Parks. The actual clean-up took 6 weeks in the worst affected areas. - Budget reduction of $381,450 for the operations and maintenance of the Village Heart precinct given the residential and commercial occupancy of the area is developing more slowly than forecast and some assets were delayed in being accepted by the City, such as the water feature. - Allocation of funding of $300,000 to cover the cost of maintaining the Helensvale Golf Course. Recent attempts to attract an operator have been progressed and Council will need to consider its options for the site. A report is being prepared for Council. In the interim there is a need to continue to undertake basic maintenance and continue a level of security at the site. - Savings of $230,000 in the HOTA facilities maintenance budget as a result of a number of rectifications being dealt with through contract defect liability conditions, reducing the reliance on the landscape budget. In addition, areas of the site that are cordoned off for construction have resulted in less reliance on maintenance budgets.

Significant Capital Works Variations Attachment 1 Equestrian Facilities $1,125,000 (Expenditure Decrease) Page 127 Council previously resolved to retain funds for future equestrian facilities in response to needs triggered by the erosion at Charlie's Crossing. Various investigations are continuing and officers are reviewing reports on modelling by TMR associated with the John Muntz bridge which influences the future response to erosion at Charlie's Crossing. An allocation of $50,000 will be retained for works this financial year, with the remainder PB_020of funding Directors returned to Council Report in this budget - review,March with future2019 funding Budget subject to further Review consideration by Council.

Gainsborough Greens $1,820,000 Expenditure Decrease, Revenue Decrease, net nil. This budget adjustment reflects that in 2017-18 there was the recognition of $4M in infrastructure charges credits for sports field works. Whilst that was recognised, works under the Infrastructure Agreement (IA) have just now been completed. As such the budget in 2018-19 should not have duplicated the IA allocation and this review reflects that correction. There is no impact on Council’s overall budget.

COMMUNITY VENUES & SERVICES

Aquatic Centres:

Gold Coast Aquatic Centre - There is an anticipated shortfall in revenue of $240,000 at this centre as a result of a slower than forecast uptake of memberships and programs following reopening of the facility after almost six months closure for GC2018.

Palm Beach Pool - Patronage numbers at this centre have exceeded original forecasts, and that of the former operator, resulting in increased revenue predictions of $290,000 this financial year. The increased patronage as well as increased program offerings has driven increased operating and labour costs including additional resourcing for lifeguards and gym programs. The additional expenditure is forecast at approximately $286,000 resulting in an approximate net nil impact in this review.

Miami Pool - Cost savings of $210,000 due to tighter control over contracts and reduction in operations and maintenance costs as the facility prepares for major redevelopment in late 2019.

Major Sporting Venues: Gold Coast Sports & Leisure Centre: $127,960 Revenue Decrease, $340,000 Expenditure Increase - Revenue forecast will not meet budget due to limited event business throughout December and last week of January, and quieter than anticipated business levels in January and February. This has had a flow through effect on food and beverage sales. - The nature of operations of this venue pre and post Games has presented difficulties in accurately forecasting venue usage and related costs. Operations are beginning to normalise but increased costs this financial year relate to increased security ($75,000), unbudgeted costs for IT and telecommunications ($25,000), additional operational and event based costs of $81,500, higher than forecast costs for servicing and maintenance of air conditioning and the building energy management system ($22,800), increased food and beverage cost of sales of $115,000, additional casual labour associated with events and catering of $35,000, partially offset by savings in electricity and cleaning services contract ($52,000).

TOURIST PARKS:

Overall reduction in operating profit of $728,809 as a result of lower than budgeted revenue predictions ($397,919) and increased operational and maintenance costs of $330,890. Heavy discounting from other accommodation providers has impacted on the ability to achieve high occupancy together with high room rates, predominantly in the Main Beach and Broadwater Tourist Parks. Additional costs have been incurred at Tallebudgera and Broadwater Tourist Parks from increased reactive maintenance due to the ageing of the asset base and as a result of unplanned electrical testing. The unfavourable result has been significantly offset by a reduction in the Transfer to the Tourist Park Reserve of $684,754. More detailed justification has been provided in the separate agenda for Gold Coast Tourist Parks March 2019 Budget Review.

Capital Works - $1,411,927 Program and Loan Funding Reduction - net nil

The 2018-19 capital program was prepared in late 2017 ahead of the Council endorsement of the Gold Coast Tourist Parks’ vision and strategy. The strategy outlines the need for significant improvement and redevelopment of the current aged facilities to ensure they are befitting of the Caravan and Camping Industry which is a $19 billion industry and has grown year on year for the past 6 years. A new Infrastructure Investment Plan is currently being developed and all current renewal work has been assessed on a case by case basis to ensure that funds are not expended on facilities that will be replaced in the Investment Plan. As such, a number of projects have been removed from the current program to ensure that future funds and opportunity are available for the Investment Plan. Project variations have been detailed in the separate agenda item.

PB_020 Budget Review - Directors Report City of Gold Coast-IN-CONFIDENCE Page : 4 of 23 Kirra Beach Tourist Park Manufactured Home Acquisition - $350,000 Expenditure Increase, $350,000 Report printed as at 02-05-2019 About this Report Transfer from Reserve A Kirra Beach Tourist Park manufactured home resident (site 154), has lodged an Expression of Interest to sell to Council - Special Circumstances for consideration. The special circumstances of the owner is supported by medical reports and is recommended to approve this request. The valuation of site 154 was completed in August 2018 by Taylor Byrne who have advised that, in their opinion, the market value of this property is $350,000. This acquisition is proposed to be funded by general borrowings (drawn back through the Tourist Park Reserve).

HEALTH REGULATORY & LIFEGUARD SERVICES:

City Parking - $605,624 Revenue Increase, $554,764 Expenditure Decrease - Revenue increase of $963,080 from bad debts recovered from infringements that were previously written off and an increase in the number of infringement fines resulting in additional revenue of $85,000 - A decrease in the number of penalty infringements issued to SPER, and subsequently recovered, has resulted in a revenue and corresponding expenditure reduction of $458,000 (net nil) - Expenditure savings of $96,764 have been realised from a reduction in legal fees in addition to reduced expenditure on various materials and services budgets such as staff uniforms, cleaning, printing, equipment and supplies.

Pest Management Capital - $250,000 Expenditure Increase Update from outdated Access 2003 database to manage service requests, work flows, mosquito sampling, surveillance and treatment data. New system will provide flexibility and mobile device support. The system generates property based (GIS) and mobile platform based (currently paper based) work flows.

Pest Management Operational Costs - $250,000 Expenditure Decrease Savings of $100,000 have been realised this financial year from a reduction in aerial treatment programs from seven to five. Seven treatments were budgeted for given the number and height of the predicted tides. The lower than expected number of aerial treatments conducted so far this season is a result of tidal inundations not occurring as predicted. Aerial treatments are necessary when tidal inundation of salt marsh breeding areas occurs. Tide heights in excess of 1.60m at the Gold Coast Seaway flood the marshes triggering mosquito larval emergence. On 2 occasions the predicted tides failed to reach predicted heights and therefore treatments were not necessary. Labour savings of $150,000 have resulted from extended long service leave absence that has not been backfilled.

Environmental Health & City Law Operations Revenue Decrease net $365,840 Revenue decrease due to the number of PINs and prosecutions being down, this is primarily due to less litter and environmental offences being detected. Many regulated activities were also brought into high levels of compliance in preparation for the Commonwealth Games.

Animal Management $251,655 Expenditure Decrease Savings have been realised in the labour budget this year as not all funds reprovided from 2017-18 to progress the Service Delivery Review implementation have been required. In addition, position vacancies, and staff leave due to long term city cover claim have resulted in reduced labour costs this financial year. Significant variations included in the Lifestyle & Community Directorate review are noted below.

PARKS & RECREATIONAL SERVICES

There are a number of significant variations in the Parks & Recreational Services maintenance budgets resulting in an overall favourable operating variation of $206,650 which includes: - Savings of $620,000 in the grass cutting budget as a result of 1 less mowing rotation this year attributed to a combination of low rainfall and high temperatures. - Weather conditions have also resulted in additional water charges of $255,000 with significantly increased irrigation required to protect important green assets such as playing surfaces. Queensland has experienced the 5th warmest year on record and rainfall for the year ended 31 Jan 2019 was 340mm below average. - Additional costs of $760,000 have been incurred for parks tree works as a result of significant weather events in December 2018. Parks and Landscape Maintenance responded to 753 requests for service as a direct result of the storms, with 72 emergency call-outs after hours. More than one third of the requests came from the suburbs of Robina, Mudgeeraba, and Varsity relating to uprooted and damaged trees, along with the clean-up of tree debris strewn across roads and our Parks. The actual clean-up took 6 weeks in the worst affected areas. - Budget reduction of $381,450 for the operations and maintenance of the Village Heart precinct given the residential and commercial occupancy of the area is developing more slowly than forecast and some assets were delayed in being accepted by the City, such as the water feature. - Allocation of funding of $300,000 to cover the cost of maintaining the Helensvale Golf Course. Recent attempts to attract an operator have been progressed and Council will need to consider its options for the site. A report is being prepared for Council. In the interim there is a need to continue to undertake basic maintenance and continue a level of security at the site. - Savings of $230,000 in the HOTA facilities maintenance budget as a result of a number of rectifications being dealt with through contract defect liability conditions, reducing the reliance on the landscape budget. In addition, areas of the site that are cordoned off for construction have resulted in less reliance on maintenance budgets.

Significant Capital Works Variations

Equestrian Facilities $1,125,000 (Expenditure Decrease) Council previously resolved to retain funds for future equestrian facilities in response to needs triggered by the erosion at Charlie's Crossing. Various investigations are continuing and officers are reviewing reports on modelling by TMR associated with the John Muntz bridge which influences the future response to erosion at Charlie's Crossing. An allocation of $50,000 will be retained for works this financial year, with the remainder of funding returned to Council in this budget review, with future funding subject to further consideration by Council.

Gainsborough Greens $1,820,000 Expenditure Decrease, Revenue Decrease, net nil. This budget adjustment reflects that in 2017-18 there was the recognition of $4M in infrastructure charges credits for sports field works. Whilst that was recognised, works under the Infrastructure Agreement (IA) have just now been completed. As such the budget in 2018-19 should not have duplicated the IA allocation and this review reflects that correction. There is no impact on Council’s overall budget.

COMMUNITY VENUES & SERVICES

Aquatic Centres:

Gold Coast Aquatic Centre - There is an anticipated shortfall in revenue of $240,000 at this centre as a result of a slower than forecast uptake of memberships and programs following reopening of the facility after almost six months closure for GC2018.

Palm Beach Pool - Patronage numbers at this centre have exceeded original forecasts, and that of the former operator, resulting in increased revenue predictions of $290,000 this financial year. The increased patronage as well as increased program offerings has driven increased operating and labour costs including additional resourcing for lifeguards and gym programs. The additional expenditure is forecast at approximately $286,000 resulting in an approximate net nil impact in this review.

Miami Pool - Cost savings of $210,000 due to tighter control over contracts and reduction in operations and maintenance costs as the facility prepares for major redevelopment in late 2019.

Major Sporting Venues: Gold Coast Sports & Leisure Centre: $127,960 Revenue Decrease, $340,000 Expenditure Increase - Revenue forecast will not meet budget due to limited event business throughout December and last week of January, and quieter than anticipated business levels in January and February. This has had a flow through effect on food and beverage sales. - The nature of operations of this venue pre and post Games has presented difficulties in accurately forecasting venue usage and related costs. Operations are beginning to normalise but increased costs this financial year relate to increased security ($75,000), unbudgeted costs for IT and telecommunications ($25,000), additional operational and event based costs of $81,500, higher than forecast costs for servicing and maintenance of air conditioning and the building energy management system ($22,800), increased food and beverage cost of sales of $115,000, additional casual labour associated with events and catering of $35,000, partially offset by savings in electricity and cleaning services contract ($52,000).

TOURIST PARKS:

Overall reduction in operating profit of $728,809 as a result of lower than budgeted revenue predictions ($397,919) and increased operational and maintenance costs of $330,890. Heavy discounting from other accommodation providers has impacted on the ability to achieve high occupancy together with high room rates, predominantly in the Main Beach and Broadwater Tourist Parks. Additional costs have been incurred at Tallebudgera and Broadwater Tourist Parks from increased reactive maintenance due to the ageing of the asset base and as a result of unplanned electrical testing. The unfavourable result has been significantly offset by a reduction in the Transfer to the Tourist Park Reserve of $684,754. More detailed justification has been provided in the separate agenda for Gold Coast Tourist Parks March 2019 Budget Review.

Capital Works - $1,411,927 Program and Loan Funding Reduction - net nil

The 2018-19 capital program was prepared in late 2017 ahead of the Council endorsement of the Gold Coast Tourist Parks’ vision and strategy. The strategy outlines the need for significant improvement and Attachment 1 redevelopment of the current aged facilities to ensure they are befitting of the Caravan and Camping Industry Page 128 which is a $19 billion industry and has grown year on year for the past 6 years. A new Infrastructure Investment Plan is currently being developed and all current renewal work has been assessed on a case by case basis to ensure that funds are not expended on facilities that will be replaced in the Investment Plan. As such, a number of projects have been removed from the current program to ensure that future funds and PB_020opportunity Directors are available for Reportthe Investment - Plan.March Project variations2019 haveBudget been detailed Review in the separate agenda item.

Kirra Beach Tourist Park Manufactured Home Acquisition - $350,000 Expenditure Increase, $350,000 Transfer from Reserve A Kirra Beach Tourist Park manufactured home resident (site 154), has lodged an Expression of Interest to sell to Council - Special Circumstances for consideration. The special circumstances of the owner is supported by medical reports and is recommended to approve this request. The valuation of site 154 was completed in August 2018 by Taylor Byrne who have advised that, in their opinion, the market value of this property is $350,000. This acquisition is proposed to be funded by general borrowings (drawn back through the Tourist Park Reserve).

HEALTH REGULATORY & LIFEGUARD SERVICES:

City Parking - $605,624 Revenue Increase, $554,764 Expenditure Decrease - Revenue increase of $963,080 from bad debts recovered from infringements that were previously written off and an increase in the number of infringement fines resulting in additional revenue of $85,000 - A decrease in the number of penalty infringements issued to SPER, and subsequently recovered, has resulted in a revenue and corresponding expenditure reduction of $458,000 (net nil) - Expenditure savings of $96,764 have been realised from a reduction in legal fees in addition to reduced expenditure on various materials and services budgets such as staff uniforms, cleaning, printing, equipment and supplies.

Pest Management Capital - $250,000 Expenditure Increase Update from outdated Access 2003 database to manage service requests, work flows, mosquito sampling, surveillance and treatment data. New system will provide flexibility and mobile device support. The system generates property based (GIS) and mobile platform based (currently paper based) work flows.

Pest Management Operational Costs - $250,000 Expenditure Decrease Savings of $100,000 have been realised this financial year from a reduction in aerial treatment programs from seven to five. Seven treatments were budgeted for given the number and height of the predicted tides. The lower than expected number of aerial treatments conducted so far this season is a result of tidal inundations not occurring as predicted. Aerial treatments are necessary when tidal inundation of salt marsh breeding areas occurs. Tide heights in excess of 1.60m at the Gold Coast Seaway flood the marshes triggering mosquito larval emergence. On 2 occasions the predicted tides failed to reach predicted heights and therefore treatments were not necessary. Labour savings of $150,000 have resulted from extended long service leave absence that has not been backfilled.

Environmental Health & City Law Operations Revenue Decrease net $365,840 Revenue decrease due to the number of PINs and prosecutions being down, this is primarily due to less litter and environmental offences being detected. Many regulated activities were also brought into high levels of compliance in preparation for the Commonwealth Games.

Animal Management $251,655 Expenditure Decrease Savings have been realised in the labour budget this year as not all funds reprovided from 2017-18 to progress the Service Delivery Review implementation have been required. In addition, position vacancies, and staff leave due to long term city cover claim have resulted in reduced labour costs this financial year.

Future Budget Trends

Director of Lifestyle & Community - Alison Ewens DATE

PB_020 Budget Review - Directors Report City of Gold Coast-IN-CONFIDENCE Page : 5 of 23 Report printed as at 02-05-2019 About this Report Attachment 1 Page 129

PB_020 Directors Report - March 2019 Budget Review

Directorate: Office of the CEO

Recurrent Non-Recurrent Total Review Review Review (Fav)/Unfav (Fav)/Unfav (Fav)/Unfav Expenses 0 (479,569) (479,569) Revenue 0 (257,031) (257,031) Net Directorate Variations 0 (736,600) (736,600)

Budget Review Categories Directorate Variations Recurrent Non-Recurrent Total Review Review Review (Fav)/Unfav (Fav)/Unfav (Fav)/Unfav General Review - Mar 19 0 359,900 359,900 Intra Directorate - Mar 19 0 0 0 Net Directorate Variations 0 359,900 359,900

Inter-Directorate Variations (Balanced between Directorates) Inter Directorate - Mar 19 0 (1,096,500) (1,096,500) Total Net Directorate Variations 0 (736,600) (736,600)

Directorate Variations - Comments on Major Variations Conduct and Performance of Councillors - $50,000 Expenditure Unfavourable ______

$50,000 additional funding is requested to fund the cost arising from investigation of the conduct and the performance of Councillors. As per the new Local Government Legislation changes, the conduct and performance of Councillors can be challenged and the cost of conducting investigation is expected to be increased and the existing budget of $3,500 is not sufficient to meet the increased cost.

Staff Car parking at Evandale - $125,000 Expenditure Favourable and $100,000 Revenue Favourable ______

Expenditure budget is reduced non-recurrently by $125,000 as the Shuttle bus to Racecourse contract is lower than the initial budget.

The initial revenue budget for 2018-19 was set lower in the anticipation of that the number of Staff Car Parking spaces will be reduced with the changes to the Evandale site. The actual revenue to end of March has exceeded the budget, therefore it’s requested to increase the annual revenue by $100,000.

Rocket Building Lease - $200,000 Expenditure Favourable ______

The lease of the Rocket building ceased in March 2019, and the budget for 2018-19 was set to cover the lease cost, electricity and the costs associated with the relocation and the storage of the remaining furniture and equipment. It’s anticipated that the expenditure will be lower than the budget and therefore $200,000 is requested to be reduced from the expense budget.

PB_020 BudgetGriffith Review University - Directors Research Report Funding - $750,000 Expenditure UnfavourableCity of Gold Coast-IN-CONFIDENCE Page : 6 of 23 ______Report printed as at 02-05-2019 About this Report

In March 2018 Council approved funding of $750,000 (Council Resolution G18.0313.017 & EPE18.0307.010) towards a research partnership between the Institute of Glycomics (IoG) and the Fraunhofer Institute. The funding was intended to be provided in two equal instalments of $375,000 in 2017-18 and 2018-19. No funding milestones could be met in 2017-18 year as the project was in its infancy as such unutilised funds from Investment Attraction Program (IAP) allocation for that year were declared as savings. The project has advanced over the past 12 months and the project is likely to meet all its milestones in the coming months. Council at its meeting of 12 February 2019 approved changes to the original funding agreement milestones. As such a new funding agreement is being drafted to reflect these changes. Funding payment criteria for all milestones are likely to meet by IoG in mid-2019, as such it is necessary for the City to meet its funding commitment by end of 2018-19 financial year.

GC 2018 Legacy Projects - $1,796,500 Expenditure Favourable ______

Budget transferred from GC2018 Legacy Projects (City savings $927,000 & State savings $869,500) to Energy Management Unit and projects in other directorates. This transfer of funds has a net nil impact to Council’s budget.

1. Gold Coast Sports Precinct - Gold Coast Sports and Leisure centre Carrara - $961,000 (50:50 City savings and State). $700,000 of this funding is allocated to Energy Management Unit for installation of additional solar panels and battery storage reducing energy costs.

2. Gold Coast Hockey Centre - new entry sign. - 30,000 (50:50 - City savings and State)

3. Gold Coast Aquatic Centre - Shade Structures - 360,000 ($360,000 50:50 - City savings and State $200,000 Revenue funding).

4. Gold Coast Health and Knowledge Precinct - $170,000 (50:50 City savings and State)

5. Coomera Sports Precinct - field and building Security Upgrades - 218,000 (50:50 City savings and State)

6. Sports Accord 2019 - Bespoke Sports Accord Program leveraging off the GC2018 and the Trade 2018 activities - $57,500 (100% City savings). Conduct and Performance of Councillors - $50,000 Expenditure Unfavourable ______

$50,000 additional funding is requested to fund the cost arising from investigation of the conduct and the performance of Councillors. As per the new Local Government Legislation changes, the conduct and performance of Councillors can be challenged and the cost of conducting investigation is expected to be increased and the existing budget of $3,500 is not sufficient to meet the increased cost.

Staff Car parking at Evandale - $125,000 Expenditure Favourable and $100,000 Revenue Favourable ______

Expenditure budget is reduced non-recurrently by $125,000 as the Shuttle bus to Racecourse contract is lower than the initial budget.

The initial revenue budget for 2018-19 was set lower in the anticipation of that the number of Staff Car Parking spaces will be reduced with the changes to the Evandale site. The actual revenue to end of March has exceeded the budget, therefore it’s requested to increase the annual revenue by $100,000.

Rocket Building Lease - $200,000 Expenditure Favourable ______

The lease of the Rocket building ceased in March 2019, and the budget for 2018-19 was set to cover the lease cost, electricity and the costs associated with the relocation and the storage of the remaining furniture and equipment. It’s anticipated that the expenditure will be lower than the budget and therefore $200,000 isAttachment 1 requested to be reduced from the expense budget. Page 130

PB_020 Directors Report - March 2019 Budget Review

Griffith University Research Funding - $750,000 Expenditure Unfavourable ______

In March 2018 Council approved funding of $750,000 (Council Resolution G18.0313.017 & EPE18.0307.010) towards a research partnership between the Institute of Glycomics (IoG) and the Fraunhofer Institute. The funding was intended to be provided in two equal instalments of $375,000 in 2017-18 and 2018-19. No funding milestones could be met in 2017-18 year as the project was in its infancy as such unutilised funds from Investment Attraction Program (IAP) allocation for that year were declared as savings. The project has advanced over the past 12 months and the project is likely to meet all its milestones in the coming months. Council at its meeting of 12 February 2019 approved changes to the original funding agreement milestones. As such a new funding agreement is being drafted to reflect these changes. Funding payment criteria for all milestones are likely to meet by IoG in mid-2019, as such it is necessary for the City to meet its funding commitment by end of 2018-19 financial year.

GC 2018 Legacy Projects - $1,796,500 Expenditure Favourable ______

Budget transferred from GC2018 Legacy Projects (City savings $927,000 & State savings $869,500) to Energy Management Unit and projects in other directorates. This transfer of funds has a net nil impact to Council’s budget.

1. Gold Coast Sports Precinct - Gold Coast Sports and Leisure centre Carrara - $961,000 (50:50 City savings and State). $700,000 of this funding is allocated to Energy Management Unit for installation of additional solar panels and battery storage reducing energy costs.

2. Gold Coast Hockey Centre - new entry sign. - 30,000 (50:50 - City savings and State)

3. Gold Coast Aquatic Centre - Shade Structures - 360,000 ($360,000 50:50 - City savings and State $200,000 Revenue funding).

4. Gold Coast Health and Knowledge Precinct - $170,000 (50:50 City savings and State)

5. Coomera Sports Precinct - field and building Security Upgrades - 218,000 (50:50 City savings and State)

6. Sports Accord 2019 - Bespoke Sports Accord Program leveraging off the GC2018 and the Trade 2018 activities - $57,500 (100% City savings).

Future Budget Trends

Office of the CEO - Luke Wallace DATE

PB_020 Budget Review - Directors Report City of Gold Coast-IN-CONFIDENCE Page : 7 of 23 Report printed as at 02-05-2019 About this Report Attachment 1 Page 131

PB_020 Directors Report - March 2019 Budget Review

Directorate: Office of the COO

Recurrent Non-Recurrent Total Review Review Review (Fav)/Unfav (Fav)/Unfav (Fav)/Unfav Expenses 0 3,216,848 3,216,848 Revenue 0 (4,534,202) (4,534,202) Net Directorate Variations 0 (1,317,354) (1,317,354)

Budget Review Categories Directorate Variations Recurrent Non-Recurrent Total Review Review Review (Fav)/Unfav (Fav)/Unfav (Fav)/Unfav General Review - Mar 19 0 (2,018,133) (2,018,133) Intra Directorate - Mar 19 0 0 0 Net Directorate Variations 0 (2,018,133) (2,018,133)

Inter-Directorate Variations (Balanced between Directorates) Inter Directorate - Mar 19 0 700,779 700,779 Total Net Directorate Variations 0 (1,317,354) (1,317,354)

Directorate Variations - Comments on Major Variations

General Loan - $350,000 Revenue Favourable ______

General Loan borrowings to be increased by $350,000 to fund the sixth purchase of the MHA site at Kirra Tourist Park under special circumstances application.

Transfer to Tourist Park Reserve - $350,000 Expenditure Unfavourable ______

$350,000 requested to be transferred to Tourist Park Reserve to cover the capital expenditure associated with the Kirra Beach Tourist Park. This funding request is to purchase a property from a Kirra Beach Tourist Park resident under a special circumstances application as part of the MHA acquisition at Kirra Beach Tourist Park. This reserve transfer to fund the acquisition is funded from general loans.

Gold Coast Airport - ex gratia rates - $305,100 Revenue Favourable and Transfer to Cultural Precinct Reserve - $305,100 Expenditure Unfavourable ______

$305,100 revenue received from Gold Coast Airport (Ex Gratia Rates) for 2018-19 is requested to be transferred to Cultural Precinct Reserve as per Council Resolution G17.0517.007.Therefore nil impact to Council’s budget.

PB_020 BudgetTransfer Review from - CulturalDirectors PrecinctReport Reserve - $1,423,000 RevenueCity Favourable of Gold Coast-IN-CONFIDENCE Page : 8 of 23 ______Report printed as at 02-05-2019 About this Report

The funding plan for Stage 1A of the Cultural Precinct included $27 million of proceeds from land sales, much of which was received after the funds were required for the project. The project received a bridging loan from the Investment Fund Reserve to help manage the cash flow issues that this presented. The loan to the Investment Fund Reserve was scheduled to be repaid partly in 2018-19 and partly in 2019-20. The initial budget included the repayment to the Investment Fund Reserve but not the proceeds from the sale of properties, which have now all been transferred to the Cultural Precinct Reserve. This transfer from reserve is to provide the funding for the repayment to the Investment Fund Reserve. As the repayment was included in the initial budget, this transfer will have a favourable impact on the budget bottom line.

Review of Invoice Pending Account - $415,305 Revenue Favourable ______

The review of the Invoice Pending account (GRIR) has resulted in a credit balance of $415,305 in 2018-19 budget, Expenses are recognised against a cost centre / project when goods are received against a purchase order and this also results in a corresponding credit to the invoice pending liability account. The invoice pending liability account is reviewed on a regular basis for old outstanding purchase order receipts with no matching invoice and such receipts are reversed to clear the liability and correct the profit and loss. Where the purchase order receipt (expense) relates to a prior financial year, this results in a credit to revenue.

Workers’ Compensation Claims - $400,000 Expenditure Unfavourable & $400,000 Revenue Favourable ______

A review of the worker compensation claims expenditure as at 4 March 2019 indicates that there is an increase in estimated payments for 2018-19. Payments to 30-06-2019 are now expected to be approximately $5.46M (including overheads), therefore the Claims budget is requested to be increased by $400,000 and this increase is offset by a transfer of $400,000 from Workers’ Compensation Reserve.

The actuarial forecast of claim payments for the 2018-19 financial year totalled $4.661M. The budget including overheads (license fee, excess of loss insurance etc.) is $5.06M

Claim expenditure to date is $3.7M and includes a payment of $693,505 for a latent onset claim by a worker exposed to asbestos while an employee in 1980-90s. The Actuary did not forecast lodgement of a latent onset claim in 2018-19 but had made provision for latent onset claims in the reserve. Also expenditure on common law claims is expected to be higher than forecast due to a higher number of claims settled than expected.

The effect on the reserve is unknown at this time as our claim experience can be very volatile from year to year. It would be therefore be prudent to await the actuarial report due in July.

Insurance Premium - 796,977 Expenditure Favourable ______

The insurance premium expense budget reduced by $$796,977 as the actual premium paid for the year is less than the budget.

Insurance Claims budget - $157,400 Revenue Favourable ______

A net Revenue increase is required to Insurance Claims budget reimbursement account based on the trend for the rest of the financial year.

Temporary Administration and Project Officer (1 FTE) - $9,200 Expenditure Unfavourable ______

One Temporary Administration and Project Officer (Level 4 annual cost $82,900) is requested for 14 months.

$9,200 Expenditure increase is requested in this review to fund the 2 months labour cost. This increase to the expense budget will be offset by the increase to revenue from claims budget.

At the present time administrative support is provided by Legal Services. The Unit handles considerably more liability claims in-house thereby reducing the reliance on external lawyers as well as now being responsible for recovering from negligent Third Parties the cost of damaged Council infrastructure, such as traffic lights, road barriers etc. Both of these additional activities are financially benefiting Council.

The role of the Coordinator Insurance has been significantly expanded to include educational and mentoring activities designed to reduce claims and enhance the Captive’s financial performance, by reducing Council's risk profile.

The Administration and Project Officer will pick up the tasks currently performed by Legal Services and assist in the new initiatives.

The Insurance section has commenced the process to pursue recovery of damages to Council assets, $60,407 has been successfully recovered to-date, and further claims have been pursued and are pending payment by third parties.

Additional budget is not required as this position will be funded from additional funds recovered from third party recovery of damage to Council assets.

P3M Program - $109,000 Expenditure Unfavourable ______

The successful implementation of Project On-line for Water & Waste in late 2017-18 has provided the first cloud based portfolio, program and project management solution for the City. This solution provides real-time information on projects and remote access on mobile devices, so the solution can be used in the field. As Directorates transition their projects onto this new solution, two legacy city project management solutions (PMIS 2010 and Clarity) will be retired, providing real-time and timely information from a single source of truth for City projects. The implementation of this project is being delivered in 3 phases:

• Phase 1 - the solution went live late in 2017-18 and Water and Waste Directorate transitioned its project business onto the solution in August 2018. In 2018-19, the solution has supported both the planning and delivery of over 300 Water and Waste Directorate projects, with 300 solution users across the city.

• Phase 2 of the project in 2018-19 has focused on ensuring the solution provides the capability required to support the transition of the Transport & Infrastructure Directorate as well as all remaining Directorates planning and delivering infrastructure projects. The solution is expected to be ready to support Directorate transitions from 1 July 2019, with relevant Directorates transitioning through 2019-20.

Funding approved for Phase 2 of the project ($180,000) only provided for a part-time project manager in 2018-19 and the project has identified that additional resources are required to support the finalisation of this project phase, an additional $109,000. This additional funding requested will provide the project with a full- time specialist project manager (additional $85,000) and a part-time testing lead ($24,000). Both of these resources are highly technical and not available from business as usual resources. It is anticipated that implementation will be completed by 30 June 2019.

• Phase 3 of the project in 2019-20 will focus on ensuring that the solution provides the capability to support all other project types (business change and technology). This final phase will complete the capability required to run all project types, enabling all remaining Directorates to transition their projects onto a single city solution. Funding includes a project manager (full-time - $290,000) and development/implementation costs for identified enhancements ($100,000).

Program & Project Management of Asset Management Improvements - $20,000 Expenditure Unfavourable ______

Additional funding for program & project management of asset management improvements across the organisation One (1) Full-time Temporary Position: Level 8 10-day fortnight for two (2) years.

Note: Approval of funding via the March 2019 Revised Budget (along with funding already available in the Corporate Asset Management 2018-19 branch budget) provides funding for this position.

Further advancing asset management practices across the organisation is critical to ensure ongoing delivery of asset-based services to the community. The challenge of managing the City's large (nearly $19B) and diverse infrastructure asset base is increasing as the asset base continues to grow along with a large portion of the long life infrastructure aging and therefore needing a much greater asset management focus to manage risks and maintain service delivery.

The Asset Management Improvement Program is in place to support Asset Custodians in Transport & Infrastructure, Water & Waste, Lifestyle & Community & Organisational Services (Property Services) and the Corporate Asset Management branch in further advancing their asset management practices. The most recent detailed Asset Management Maturity Assessment identified 113 improvement opportunities, with the Asset Management Improvement Program now having over 600 identified initiatives/actions. These initiatives cover a wide range of improvements such as: - Improving integrity of and access to asset information to support a wide of business needs e.g. Asset Revaluations (and other Queensland Audit Office requirements), Asset Management Plans, various operational business functions, etc. - More rigour in identifying defects and undertaking condition assessments of assets - Ensuring all Asset Management Plans meet minimum requirements and are further advanced to optimise asset investment decision making - Further developing the organisation's asset management policies and frameworks to better enable management of asset based services

It is important to note that one of the seven key findings of the most recent Asset Management Maturity Assessment (conducted by specialist consultants) was "need to strengthen the whole-of-organisation approach to driving asset management improvements", including "program management needs to be strengthened".

Corporate Asset Management has funding available in the 2018-19 branch budget for a position to support coordination of these asset management improvements, however due to an increase in the scope and complexity of improvement initiatives for the coming two (2) year period a higher level resource is required. Therefore additional funding of $20,000 is required.

The increase in scope and complexity for this position includes being the project manager for the re- development of the Asset Management Framework that has not been reviewed since 2009 and needs to be completely re-built to better support Asset Custodians in Transport & Infrastructure, Water & Waste, Lifestyle & Community and Organisational Services (Property Services) in managing the City's infrastructure asset base. This will include aligning with the International Standards for Asset Management that were first released five years ago, with there being a clear industry trend of large asset intensive organisations (including Water Utilities) adopting and implementing the International Standards to increase the level of rigour in managing infrastructure assets.

Coordination of Maintenance Management improvements - $140,000 Expenditure Unfavourable ______

Funding is requested for Coordination of Maintenance Management improvements across the organisation One (1) Full-time Temporary Position: Level 8 10-day fortnight for two (2) years.

Note: This position is required for two (2) years. Approval of funding via the March 2019 Revised Budget provides funding for the first year for this position. A further budget submission to be made via the 2020-21 budget process to fund the second year for this position.

The new integrated Maintenance Management System and associated field mobile computing solution were implemented as part of the ERP Project Release 2 go-live in May 2014. With the initial focus being on getting the basic maintenance practices in place for infrastructure and fleet assets.

A detailed maturity assessment of maintenance practices was recently completed that included Transport & Infrastructure, Water & Waste, Lifestyle & Community, Organisational Services (Property Services & Fleet). The maturity assessment identified 112 improvement opportunities that have potential to add substantial benefits across all of these areas and the associated road, drainage, water, sewer, parks and community building assets, including: - Further leveraging the capabilities of the Maintenance Management System that was implemented in 2014 - Recording better information on completed maintenance activities to inform future budgets and make decisions on the types of maintenance needed. - Improved planning and scheduling of maintenance works, so there is a better understanding of when work will be done, along with improving the ability to bundle up work to be done in a particular area resulting is less trips by work crews - Investigating options for better procurement arrangements for maintenance parts & materials, to get better deals for the City and potentially reduce travel time for work crews picking up parts & materials

The maturity assessment also highlighted why improving maintenance practices are important, as the City has: - Over one and half million infrastructure and fleet assets - A maintenance & operations field workforce of around 1000 staff with more than 500 mobile devices (i.e. iPADs) deployed to support maintenance & operations functions - Over a quarter of a million Work Orders are undertaken annually - A range of maintenance & operation functions undertaken through contracts with external providers.

This position is required to support Transport & Infrastructure, Water & Waste, Lifestyle & Community and Organisational Services (Property Services & Fleet) in improving maintenance practices through: - Provide information to the directors to inform the prioritisation of improvement initiatives, including information on the dependencies between improvement initiatives - Develop an overall implementation plan for improving maintenance practices - Coordinating the improvement initiatives identified in the recent maturity assessment that involve multiple directorates - Supporting the directorates with the collation and justification of ICT system needs/changes - Providing status reports to directors

Note: The Full-Time Temporary Level 8 Position for 18 months that undertook the detailed maturity assessment finished in February 2019. The requested position is a continuation of this work.

Enhancement of Asset & Maintenance Management ICT Systems - $150,000 Expenditure Unfavourable ______

Funding is requested for Enhancement of Asset & Maintenance Management ICT Systems.

As part of the ERP Project Release 2 the following Asset & Maintenance ICT Systems were implemented and went live in May 2014: - A consolidated Asset Register to record and manage asset data - The new integrated Maintenance Management System and associated field mobile computing work order management application

There are over 1.5 million infrastructure and fleet assets recorded in these ICT systems, with these ICT systems dispatching over a quarter of a million Work Orders annually (via 500 field mobile devices) to the City’s maintenance & operations field workforce of around 1000 staff

Since these systems went live five years ago, Asset Custodians and Maintenance areas in Transport & Infrastructure, Water & Waste, Lifestyle & Community and Organisational Services (Fleet & Property Services) have identified 23 different Asset & Maintenance Management ICT improvements needed to underpin delivery of asset based services to the community.

This funded is needed to support the directorates in progressing immediate priorities through: - Development of a project plan to deliver priority Asset & Maintenance Management ICT items - Providing a solution for capturing and storing information from asset defect & condition assessment field inspections for a range of asset types such as roads, bridges (including detailed structural inspections), pathways, retaining walls, playgrounds, electrical assets, etc. - Investigating option to provide external contractors with access to the City’s Maintenance Management System to ensure Work Orders can be quickly issued to external contractors and the details of work undertaken by the external contractors can be uploaded into the City’s Maintenance Management System.

The above items are key ICT capabilities that the directorates need to maintain the City’s assets and manage the risk associated with these assets.

Chain of Responsibility under Heavy Vehicle National Law - $100,000 Expenditure Unfavourable ______

$100,000 is requested to provide a temporary resource for 12 months to scope and develop the relevant procedures and supporting documents to comply with the Heavy Vehicle National Law.

In October 2018, the Heavy Vehicle National Law (HVNL) was amended to specify that every party in the heavy vehicle transport supply chain has a primary duty of care to ensure the safety of their transport activities. The supply chain typically includes the employer of a driver, the operator of the vehicle, a scheduler for the vehicle, a loading manager for any goods in the vehicle, loader and/or unloader of the vehicle, a consignor of any goods for transport by the vehicle, a consignee of any goods in the vehicle and a loader and/or unloader of any goods in the vehicle. In a prosecution, the courts may consider the actions of each party in the supply chain. This includes what measures those parties have in place to prevent breaches of the HVNL occurring. Each party in the chain must demonstrate to the Court that they took all reasonable steps to prevent the contravention or show the court that there were no steps they could reasonably be expected to have taken to prevent the contravention.

This requirement applies across various areas of Council, but specific examples include the transfer of waste by truck from recycle centres to landfill and the transport and delivery of plant and equipment to construction sites.

As with workplace health & safety, an effective safety management system will assist Council in complying with legislative obligations to meet the Heavy Vehicle National Law.

In order to address the legislation, a gap analysis is required to identify procedures that require development to meet the Heavy Vehicle National Law.

Major Events Support - $530,000 Expenditure Unfavourable and Revenue Favourable ______

As per the Council Resolutions, expenditure budget allocated to the following events by transferring funds from Events Reserve.

Eurovision (Australia Decides) - $150,000

Council resolved (G18.0921.018) that the Council will contribute a maximum of $150,000 with funding to be allocated from the Events Reserve.

Sport Accord - $300,000

City of Gold Coast will contribute $300,000 cash to support the Sport Accord Convention and this expenditure budget to be funded from Events Reserve (Council Resolution - G18.0814.019).

Combined Churches Easter Event - $80,000

Council resolved that the Council will provide one-off support to the 2019 Combined Churches Easter Celebrations to be held in April 2019 at the HOTA Outdoor Stage via Kind of support of up to $80,000, and the source of funds being the Events Reserve (G19.0130.028).

Transfer to Reserves - $350,000 Expenditure Unfavourable ______

Additional $350,000 revenue received from levy rates is requested to be transferred to the Reserve for allocation in the future budgets. The reason for the higher revenue received from levy than the anticipated revenue is due to increased number of rateable properties. This increase to expenditure budget is to be offset by an increase to revenue in Organisational Services Directorate. Therefore net nil impact to Council’s budget.

· Transfer to Parks and Recreational Reserve - $50,000 · Open Space Reserve - $75,000 · City Transport Improvement Separate Charges Reserve - $225,000

NCP adjustments to Business Units. ______

NCP Adjustments to Tourist Parks - $44,055 Net Revenue Unfavourable

Tax Equivalent - $255,127 Revenue Unfavourable

Tax Equivalent revenue receivable (30%) from Tourist Parks is reduced by $255,127. This is due to reduced profitability of the Parks as a consequence of lower revenues and additional maintenance costs.

Dividend - $211,072 Revenue Favourable

Dividend from Tourist Parks is increased by $211,072. Increase to dividend during the year is usually transferred to Tourist Park reserves, but considering the 2018-19 financial performance, the Tourist Parks business unit has opted to pay a dividend to Council to offset part of the reduction to Tax Equivalent revenue receivable.

NCP Adjustments to Water & Sewerage - $574,883 Revenue Unfavourable

Tax Equivalent - $574,833 Revenue Unfavourable

Tax Equivalent revenue (30%) from Water & Sewerage business unit is reduced by $574,883. Water and Sewerage business unit has recorded a number of budgetary changes throughout the financial year, this has resulted in a reduction to Tax Equivalent Revenue receivable (less than 1.5%) from Water & Sewerage business unit.

NCP Adjustments to Waste - $33,568 Revenue Unfavourable

Tax Equivalent - $33,568 Revenue Unfavourable

Tax Equivalent revenue (30%) from Waste Management is reduced by $33,568. As a result of the various budgetary changes recorded as part of the March 2019 budget review in Waste Management business unit, a minor reduction (less than 0.5%) to Tax Equivalent Revenue receivable from Waste Management. General Loan - $350,000 Revenue Favourable ______

General Loan borrowings to be increased by $350,000 to fund the sixth purchase of the MHA site at Kirra Tourist Park under special circumstances application.

Transfer to Tourist Park Reserve - $350,000 Expenditure Unfavourable ______

$350,000 requested to be transferred to Tourist Park Reserve to cover the capital expenditure associated with the Kirra Beach Tourist Park. This funding request is to purchase a property from a Kirra Beach Tourist Park resident under a special circumstances application as part of the MHA acquisition at Kirra Beach Tourist Park. This reserve transfer to fund the acquisition is funded from general loans.

Gold Coast Airport - ex gratia rates - $305,100 Revenue Favourable and Transfer to Cultural Precinct Reserve - $305,100 Expenditure Unfavourable ______

$305,100 revenue received from Gold Coast Airport (Ex Gratia Rates) for 2018-19 is requested to be transferred to Cultural Precinct Reserve as per Council Resolution G17.0517.007.Therefore nil impact to Council’s budget. Attachment 1 Page 132

PB_020 Directors Report - March 2019 Budget Review

Transfer from Cultural Precinct Reserve - $1,423,000 Revenue Favourable ______

The funding plan for Stage 1A of the Cultural Precinct included $27 million of proceeds from land sales, much of which was received after the funds were required for the project. The project received a bridging loan from the Investment Fund Reserve to help manage the cash flow issues that this presented. The loan to the Investment Fund Reserve was scheduled to be repaid partly in 2018-19 and partly in 2019-20. The initial budget included the repayment to the Investment Fund Reserve but not the proceeds from the sale of properties, which have now all been transferred to the Cultural Precinct Reserve. This transfer from reserve is to provide the funding for the repayment to the Investment Fund Reserve. As the repayment was included in the initial budget, this transfer will have a favourable impact on the budget bottom line.

Review of Invoice Pending Account - $415,305 Revenue Favourable ______

The review of the Invoice Pending account (GRIR) has resulted in a credit balance of $415,305 in 2018-19 budget, Expenses are recognised against a cost centre / project when goods are received against a purchase order and this also results in a corresponding credit to the invoice pending liability account. The invoice pending liability account is reviewed on a regular basis for old outstanding purchase order receipts with no matching invoice and such receipts are reversed to clear the liability and correct the profit and loss. Where the purchase order receipt (expense) relates to a prior financial year, this results in a credit to revenue.

Workers’ Compensation Claims - $400,000 Expenditure Unfavourable & $400,000 Revenue Favourable ______

A review of the worker compensation claims expenditure as at 4 March 2019 indicates that there is an increase in estimated payments for 2018-19. Payments to 30-06-2019 are now expected to be approximately $5.46M (including overheads), therefore the Claims budget is requested to be increased by $400,000 and this increase is offset by a transfer of $400,000 from Workers’ Compensation Reserve.

The actuarial forecast of claim payments for the 2018-19 financial year totalled $4.661M. The budget including overheads (license fee, excess of loss insurance etc.) is $5.06M

Claim expenditure to date is $3.7M and includes a payment of $693,505 for a latent onset claim by a worker exposed to asbestos while an employee in 1980-90s. The Actuary did not forecast lodgement of a latent onset claim in 2018-19 but had made provision for latent onset claims in the reserve. Also expenditure on common law claims is expected to be higher than forecast due to a higher number of claims settled than expected.

The effect on the reserve is unknown at this time as our claim experience can be very volatile from year to year. It would be therefore be prudent to await the actuarial report due in July.

Insurance Premium - 796,977 Expenditure Favourable ______

The insurance premium expense budget reduced by $$796,977 as the actual premium paid for the year is less than the budget.

Insurance Claims budget - $157,400 Revenue Favourable ______

A net Revenue increase is required to Insurance Claims budget reimbursement account based on the trend for the rest of the financial year.

PB_020 BudgetTemporary Review Administration - Directors Report and Project Officer (1 FTE) - $9,200City Expenditure of Gold Coast-IN-CONFIDENCE Unfavourable Page : 9 of 23 ______Report printed as at 02-05-2019 About this Report

One Temporary Administration and Project Officer (Level 4 annual cost $82,900) is requested for 14 months.

$9,200 Expenditure increase is requested in this review to fund the 2 months labour cost. This increase to the expense budget will be offset by the increase to revenue from claims budget.

At the present time administrative support is provided by Legal Services. The Unit handles considerably more liability claims in-house thereby reducing the reliance on external lawyers as well as now being responsible for recovering from negligent Third Parties the cost of damaged Council infrastructure, such as traffic lights, road barriers etc. Both of these additional activities are financially benefiting Council.

The role of the Coordinator Insurance has been significantly expanded to include educational and mentoring activities designed to reduce claims and enhance the Captive’s financial performance, by reducing Council's risk profile.

The Administration and Project Officer will pick up the tasks currently performed by Legal Services and assist in the new initiatives.

The Insurance section has commenced the process to pursue recovery of damages to Council assets, $60,407 has been successfully recovered to-date, and further claims have been pursued and are pending payment by third parties.

Additional budget is not required as this position will be funded from additional funds recovered from third party recovery of damage to Council assets.

P3M Program - $109,000 Expenditure Unfavourable ______

The successful implementation of Project On-line for Water & Waste in late 2017-18 has provided the first cloud based portfolio, program and project management solution for the City. This solution provides real-time information on projects and remote access on mobile devices, so the solution can be used in the field. As Directorates transition their projects onto this new solution, two legacy city project management solutions (PMIS 2010 and Clarity) will be retired, providing real-time and timely information from a single source of truth for City projects. The implementation of this project is being delivered in 3 phases:

• Phase 1 - the solution went live late in 2017-18 and Water and Waste Directorate transitioned its project business onto the solution in August 2018. In 2018-19, the solution has supported both the planning and delivery of over 300 Water and Waste Directorate projects, with 300 solution users across the city.

• Phase 2 of the project in 2018-19 has focused on ensuring the solution provides the capability required to support the transition of the Transport & Infrastructure Directorate as well as all remaining Directorates planning and delivering infrastructure projects. The solution is expected to be ready to support Directorate transitions from 1 July 2019, with relevant Directorates transitioning through 2019-20.

Funding approved for Phase 2 of the project ($180,000) only provided for a part-time project manager in 2018-19 and the project has identified that additional resources are required to support the finalisation of this project phase, an additional $109,000. This additional funding requested will provide the project with a full- time specialist project manager (additional $85,000) and a part-time testing lead ($24,000). Both of these resources are highly technical and not available from business as usual resources. It is anticipated that implementation will be completed by 30 June 2019.

• Phase 3 of the project in 2019-20 will focus on ensuring that the solution provides the capability to support all other project types (business change and technology). This final phase will complete the capability required to run all project types, enabling all remaining Directorates to transition their projects onto a single city solution. Funding includes a project manager (full-time - $290,000) and development/implementation costs for identified enhancements ($100,000).

Program & Project Management of Asset Management Improvements - $20,000 Expenditure Unfavourable ______

Additional funding for program & project management of asset management improvements across the organisation One (1) Full-time Temporary Position: Level 8 10-day fortnight for two (2) years.

Note: Approval of funding via the March 2019 Revised Budget (along with funding already available in the Corporate Asset Management 2018-19 branch budget) provides funding for this position.

Further advancing asset management practices across the organisation is critical to ensure ongoing delivery of asset-based services to the community. The challenge of managing the City's large (nearly $19B) and diverse infrastructure asset base is increasing as the asset base continues to grow along with a large portion of the long life infrastructure aging and therefore needing a much greater asset management focus to manage risks and maintain service delivery.

The Asset Management Improvement Program is in place to support Asset Custodians in Transport & Infrastructure, Water & Waste, Lifestyle & Community & Organisational Services (Property Services) and the Corporate Asset Management branch in further advancing their asset management practices. The most recent detailed Asset Management Maturity Assessment identified 113 improvement opportunities, with the Asset Management Improvement Program now having over 600 identified initiatives/actions. These initiatives cover a wide range of improvements such as: - Improving integrity of and access to asset information to support a wide of business needs e.g. Asset Revaluations (and other Queensland Audit Office requirements), Asset Management Plans, various operational business functions, etc. - More rigour in identifying defects and undertaking condition assessments of assets - Ensuring all Asset Management Plans meet minimum requirements and are further advanced to optimise asset investment decision making - Further developing the organisation's asset management policies and frameworks to better enable management of asset based services

It is important to note that one of the seven key findings of the most recent Asset Management Maturity Assessment (conducted by specialist consultants) was "need to strengthen the whole-of-organisation approach to driving asset management improvements", including "program management needs to be strengthened".

Corporate Asset Management has funding available in the 2018-19 branch budget for a position to support coordination of these asset management improvements, however due to an increase in the scope and complexity of improvement initiatives for the coming two (2) year period a higher level resource is required. Therefore additional funding of $20,000 is required.

The increase in scope and complexity for this position includes being the project manager for the re- development of the Asset Management Framework that has not been reviewed since 2009 and needs to be completely re-built to better support Asset Custodians in Transport & Infrastructure, Water & Waste, Lifestyle & Community and Organisational Services (Property Services) in managing the City's infrastructure asset base. This will include aligning with the International Standards for Asset Management that were first released five years ago, with there being a clear industry trend of large asset intensive organisations (including Water Utilities) adopting and implementing the International Standards to increase the level of rigour in managing infrastructure assets.

Coordination of Maintenance Management improvements - $140,000 Expenditure Unfavourable ______

Funding is requested for Coordination of Maintenance Management improvements across the organisation One (1) Full-time Temporary Position: Level 8 10-day fortnight for two (2) years.

Note: This position is required for two (2) years. Approval of funding via the March 2019 Revised Budget provides funding for the first year for this position. A further budget submission to be made via the 2020-21 budget process to fund the second year for this position.

The new integrated Maintenance Management System and associated field mobile computing solution were implemented as part of the ERP Project Release 2 go-live in May 2014. With the initial focus being on getting the basic maintenance practices in place for infrastructure and fleet assets.

A detailed maturity assessment of maintenance practices was recently completed that included Transport & Infrastructure, Water & Waste, Lifestyle & Community, Organisational Services (Property Services & Fleet). The maturity assessment identified 112 improvement opportunities that have potential to add substantial benefits across all of these areas and the associated road, drainage, water, sewer, parks and community building assets, including: - Further leveraging the capabilities of the Maintenance Management System that was implemented in 2014 - Recording better information on completed maintenance activities to inform future budgets and make decisions on the types of maintenance needed. - Improved planning and scheduling of maintenance works, so there is a better understanding of when work will be done, along with improving the ability to bundle up work to be done in a particular area resulting is less trips by work crews - Investigating options for better procurement arrangements for maintenance parts & materials, to get better deals for the City and potentially reduce travel time for work crews picking up parts & materials

The maturity assessment also highlighted why improving maintenance practices are important, as the City has: - Over one and half million infrastructure and fleet assets - A maintenance & operations field workforce of around 1000 staff with more than 500 mobile devices (i.e. iPADs) deployed to support maintenance & operations functions - Over a quarter of a million Work Orders are undertaken annually - A range of maintenance & operation functions undertaken through contracts with external providers.

This position is required to support Transport & Infrastructure, Water & Waste, Lifestyle & Community and Organisational Services (Property Services & Fleet) in improving maintenance practices through: - Provide information to the directors to inform the prioritisation of improvement initiatives, including information on the dependencies between improvement initiatives - Develop an overall implementation plan for improving maintenance practices - Coordinating the improvement initiatives identified in the recent maturity assessment that involve multiple directorates - Supporting the directorates with the collation and justification of ICT system needs/changes - Providing status reports to directors

Note: The Full-Time Temporary Level 8 Position for 18 months that undertook the detailed maturity assessment finished in February 2019. The requested position is a continuation of this work.

Enhancement of Asset & Maintenance Management ICT Systems - $150,000 Expenditure Unfavourable ______

Funding is requested for Enhancement of Asset & Maintenance Management ICT Systems.

As part of the ERP Project Release 2 the following Asset & Maintenance ICT Systems were implemented and went live in May 2014: - A consolidated Asset Register to record and manage asset data - The new integrated Maintenance Management System and associated field mobile computing work order management application

There are over 1.5 million infrastructure and fleet assets recorded in these ICT systems, with these ICT systems dispatching over a quarter of a million Work Orders annually (via 500 field mobile devices) to the City’s maintenance & operations field workforce of around 1000 staff

Since these systems went live five years ago, Asset Custodians and Maintenance areas in Transport & Infrastructure, Water & Waste, Lifestyle & Community and Organisational Services (Fleet & Property Services) have identified 23 different Asset & Maintenance Management ICT improvements needed to underpin delivery of asset based services to the community.

This funded is needed to support the directorates in progressing immediate priorities through: - Development of a project plan to deliver priority Asset & Maintenance Management ICT items - Providing a solution for capturing and storing information from asset defect & condition assessment field inspections for a range of asset types such as roads, bridges (including detailed structural inspections), pathways, retaining walls, playgrounds, electrical assets, etc. - Investigating option to provide external contractors with access to the City’s Maintenance Management System to ensure Work Orders can be quickly issued to external contractors and the details of work undertaken by the external contractors can be uploaded into the City’s Maintenance Management System.

The above items are key ICT capabilities that the directorates need to maintain the City’s assets and manage the risk associated with these assets.

Chain of Responsibility under Heavy Vehicle National Law - $100,000 Expenditure Unfavourable ______

$100,000 is requested to provide a temporary resource for 12 months to scope and develop the relevant procedures and supporting documents to comply with the Heavy Vehicle National Law.

In October 2018, the Heavy Vehicle National Law (HVNL) was amended to specify that every party in the heavy vehicle transport supply chain has a primary duty of care to ensure the safety of their transport activities. The supply chain typically includes the employer of a driver, the operator of the vehicle, a scheduler for the vehicle, a loading manager for any goods in the vehicle, loader and/or unloader of the vehicle, a consignor of any goods for transport by the vehicle, a consignee of any goods in the vehicle and a loader and/or unloader of any goods in the vehicle. In a prosecution, the courts may consider the actions of each party in the supply chain. This includes what measures those parties have in place to prevent breaches of the HVNL occurring. Each party in the chain must demonstrate to the Court that they took all reasonable steps to prevent the contravention or show the court that there were no steps they could reasonably be expected to have taken to prevent the contravention.

This requirement applies across various areas of Council, but specific examples include the transfer of waste by truck from recycle centres to landfill and the transport and delivery of plant and equipment to construction sites.

As with workplace health & safety, an effective safety management system will assist Council in complying with legislative obligations to meet the Heavy Vehicle National Law.

In order to address the legislation, a gap analysis is required to identify procedures that require development to meet the Heavy Vehicle National Law.

Major Events Support - $530,000 Expenditure Unfavourable and Revenue Favourable ______

As per the Council Resolutions, expenditure budget allocated to the following events by transferring funds from Events Reserve.

Eurovision (Australia Decides) - $150,000

Council resolved (G18.0921.018) that the Council will contribute a maximum of $150,000 with funding to be allocated from the Events Reserve.

Sport Accord - $300,000

City of Gold Coast will contribute $300,000 cash to support the Sport Accord Convention and this expenditure budget to be funded from Events Reserve (Council Resolution - G18.0814.019).

Combined Churches Easter Event - $80,000

Council resolved that the Council will provide one-off support to the 2019 Combined Churches Easter Celebrations to be held in April 2019 at the HOTA Outdoor Stage via Kind of support of up to $80,000, and the source of funds being the Events Reserve (G19.0130.028).

Transfer to Reserves - $350,000 Expenditure Unfavourable ______

Additional $350,000 revenue received from levy rates is requested to be transferred to the Reserve for allocation in the future budgets. The reason for the higher revenue received from levy than the anticipated revenue is due to increased number of rateable properties. This increase to expenditure budget is to be offset by an increase to revenue in Organisational Services Directorate. Therefore net nil impact to Council’s budget.

· Transfer to Parks and Recreational Reserve - $50,000 · Open Space Reserve - $75,000 · City Transport Improvement Separate Charges Reserve - $225,000

NCP adjustments to Business Units. ______

NCP Adjustments to Tourist Parks - $44,055 Net Revenue Unfavourable

Tax Equivalent - $255,127 Revenue Unfavourable

Tax Equivalent revenue receivable (30%) from Tourist Parks is reduced by $255,127. This is due to reduced profitability of the Parks as a consequence of lower revenues and additional maintenance costs.

Dividend - $211,072 Revenue Favourable

Dividend from Tourist Parks is increased by $211,072. Increase to dividend during the year is usually transferred to Tourist Park reserves, but considering the 2018-19 financial performance, the Tourist Parks business unit has opted to pay a dividend to Council to offset part of the reduction to Tax Equivalent revenue receivable.

NCP Adjustments to Water & Sewerage - $574,883 Revenue Unfavourable

Tax Equivalent - $574,833 Revenue Unfavourable

Tax Equivalent revenue (30%) from Water & Sewerage business unit is reduced by $574,883. Water and Sewerage business unit has recorded a number of budgetary changes throughout the financial year, this has resulted in a reduction to Tax Equivalent Revenue receivable (less than 1.5%) from Water & Sewerage business unit.

NCP Adjustments to Waste - $33,568 Revenue Unfavourable

Tax Equivalent - $33,568 Revenue Unfavourable

Tax Equivalent revenue (30%) from Waste Management is reduced by $33,568. As a result of the various budgetary changes recorded as part of the March 2019 budget review in Waste Management business unit, a minor reduction (less than 0.5%) to Tax Equivalent Revenue receivable from Waste Management. General Loan - $350,000 Revenue Favourable ______

General Loan borrowings to be increased by $350,000 to fund the sixth purchase of the MHA site at Kirra Tourist Park under special circumstances application.

Transfer to Tourist Park Reserve - $350,000 Expenditure Unfavourable ______

$350,000 requested to be transferred to Tourist Park Reserve to cover the capital expenditure associated with the Kirra Beach Tourist Park. This funding request is to purchase a property from a Kirra Beach Tourist Park resident under a special circumstances application as part of the MHA acquisition at Kirra Beach Tourist Park. This reserve transfer to fund the acquisition is funded from general loans.

Gold Coast Airport - ex gratia rates - $305,100 Revenue Favourable and Transfer to Cultural Precinct Reserve - $305,100 Expenditure Unfavourable ______

$305,100 revenue received from Gold Coast Airport (Ex Gratia Rates) for 2018-19 is requested to be transferred to Cultural Precinct Reserve as per Council Resolution G17.0517.007.Therefore nil impact to Council’s budget.

Transfer from Cultural Precinct Reserve - $1,423,000 Revenue Favourable ______

The funding plan for Stage 1A of the Cultural Precinct included $27 million of proceeds from land sales, much of which was received after the funds were required for the project. The project received a bridging loan from the Investment Fund Reserve to help manage the cash flow issues that this presented. The loan to the Investment Fund Reserve was scheduled to be repaid partly in 2018-19 and partly in 2019-20. The initial budget included the repayment to the Investment Fund Reserve but not the proceeds from the sale of properties, which have now all been transferred to the Cultural Precinct Reserve. This transfer from reserve is to provide the funding for the repayment to the Investment Fund Reserve. As the repayment was included in the initial budget, this transfer will have a favourable impact on the budget bottom line.

Review of Invoice Pending Account - $415,305 Revenue Favourable ______

The review of the Invoice Pending account (GRIR) has resulted in a credit balance of $415,305 in 2018-19 budget, Expenses are recognised against a cost centre / project when goods are received against a purchase order and this also results in a corresponding credit to the invoice pending liability account. The invoice pending liability account is reviewed on a regular basis for old outstanding purchase order receipts with no matching invoice and such receipts are reversed to clear the liability and correct the profit and loss. Where the purchase order receipt (expense) relates to a prior financial year, this results in a credit to revenue.

Workers’ Compensation Claims - $400,000 Expenditure Unfavourable & $400,000 Revenue Favourable ______

A review of the worker compensation claims expenditure as at 4 March 2019 indicates that there is an increase in estimated payments for 2018-19. Payments to 30-06-2019 are now expected to be approximately $5.46M (including overheads), therefore the Claims budget is requested to be increased by $400,000 and this increase is offset by a transfer of $400,000 from Workers’ Compensation Reserve.

The actuarial forecast of claim payments for the 2018-19 financial year totalled $4.661M. The budget including overheads (license fee, excess of loss insurance etc.) is $5.06M

Claim expenditure to date is $3.7M and includes a payment of $693,505 for a latent onset claim by a worker exposed to asbestos while an employee in 1980-90s. The Actuary did not forecast lodgement of a latent onset claim in 2018-19 but had made provision for latent onset claims in the reserve. Also expenditure on common law claims is expected to be higher than forecast due to a higher number of claims settled than expected.

The effect on the reserve is unknown at this time as our claim experience can be very volatile from year to year. It would be therefore be prudent to await the actuarial report due in July.

Insurance Premium - 796,977 Expenditure Favourable ______

The insurance premium expense budget reduced by $$796,977 as the actual premium paid for the year is less than the budget.

Insurance Claims budget - $157,400 Revenue Favourable Attachment 1 ______Page 133

A net Revenue increase is required to Insurance Claims budget reimbursement account based on the trend for the rest of the financial year. PB_020 Directors Report - March 2019 Budget Review

Temporary Administration and Project Officer (1 FTE) - $9,200 Expenditure Unfavourable ______

One Temporary Administration and Project Officer (Level 4 annual cost $82,900) is requested for 14 months.

$9,200 Expenditure increase is requested in this review to fund the 2 months labour cost. This increase to the expense budget will be offset by the increase to revenue from claims budget.

At the present time administrative support is provided by Legal Services. The Unit handles considerably more liability claims in-house thereby reducing the reliance on external lawyers as well as now being responsible for recovering from negligent Third Parties the cost of damaged Council infrastructure, such as traffic lights, road barriers etc. Both of these additional activities are financially benefiting Council.

The role of the Coordinator Insurance has been significantly expanded to include educational and mentoring activities designed to reduce claims and enhance the Captive’s financial performance, by reducing Council's risk profile.

The Administration and Project Officer will pick up the tasks currently performed by Legal Services and assist in the new initiatives.

The Insurance section has commenced the process to pursue recovery of damages to Council assets, $60,407 has been successfully recovered to-date, and further claims have been pursued and are pending payment by third parties.

Additional budget is not required as this position will be funded from additional funds recovered from third party recovery of damage to Council assets.

P3M Program - $109,000 Expenditure Unfavourable ______

The successful implementation of Project On-line for Water & Waste in late 2017-18 has provided the first cloud based portfolio, program and project management solution for the City. This solution provides real-time information on projects and remote access on mobile devices, so the solution can be used in the field. As Directorates transition their projects onto this new solution, two legacy city project management solutions (PMIS 2010 and Clarity) will be retired, providing real-time and timely information from a single source of truth for City projects. The implementation of this project is being delivered in 3 phases:

• Phase 1 - the solution went live late in 2017-18 and Water and Waste Directorate transitioned its project business onto the solution in August 2018. In 2018-19, the solution has supported both the planning and delivery of over 300 Water and Waste Directorate projects, with 300 solution users across the city.

• Phase 2 of the project in 2018-19 has focused on ensuring the solution provides the capability required to support the transition of the Transport & Infrastructure Directorate as well as all remaining Directorates planning and delivering infrastructure projects. The solution is expected to be ready to support Directorate transitions from 1 July 2019, with relevant Directorates transitioning through 2019-20.

Funding approved for Phase 2 of the project ($180,000) only provided for a part-time project manager in 2018-19 and the project has identified that additional resources are required to support the finalisation of this project phase, an additional $109,000. This additional funding requested will provide the project with a full- time specialist project manager (additional $85,000) and a part-time testing lead ($24,000). Both of these resources are highly technical and not available from business as usual resources. It is anticipated that implementation will be completed by 30 June 2019.

• Phase 3 of the project in 2019-20 will focus on ensuring that the solution provides the capability to support all other project types (business change and technology). This final phase will complete the capability required to run all project types, enabling all remaining Directorates to transition their projects onto a single city solution. Funding includes a project manager (full-time - $290,000) and development/implementation costs for identified enhancements ($100,000).

PB_020 BudgetProgram Review & Project - Directors Management Report of Asset Management ImprovementsCity of Gold - $20,000 Coast-IN-CONFIDENCE Expenditure Unfavourable Page : 10 of 23 ______Report printed as at 02-05-2019 About this Report

Additional funding for program & project management of asset management improvements across the organisation One (1) Full-time Temporary Position: Level 8 10-day fortnight for two (2) years.

Note: Approval of funding via the March 2019 Revised Budget (along with funding already available in the Corporate Asset Management 2018-19 branch budget) provides funding for this position.

Further advancing asset management practices across the organisation is critical to ensure ongoing delivery of asset-based services to the community. The challenge of managing the City's large (nearly $19B) and diverse infrastructure asset base is increasing as the asset base continues to grow along with a large portion of the long life infrastructure aging and therefore needing a much greater asset management focus to manage risks and maintain service delivery.

The Asset Management Improvement Program is in place to support Asset Custodians in Transport & Infrastructure, Water & Waste, Lifestyle & Community & Organisational Services (Property Services) and the Corporate Asset Management branch in further advancing their asset management practices. The most recent detailed Asset Management Maturity Assessment identified 113 improvement opportunities, with the Asset Management Improvement Program now having over 600 identified initiatives/actions. These initiatives cover a wide range of improvements such as: - Improving integrity of and access to asset information to support a wide of business needs e.g. Asset Revaluations (and other Queensland Audit Office requirements), Asset Management Plans, various operational business functions, etc. - More rigour in identifying defects and undertaking condition assessments of assets - Ensuring all Asset Management Plans meet minimum requirements and are further advanced to optimise asset investment decision making - Further developing the organisation's asset management policies and frameworks to better enable management of asset based services

It is important to note that one of the seven key findings of the most recent Asset Management Maturity Assessment (conducted by specialist consultants) was "need to strengthen the whole-of-organisation approach to driving asset management improvements", including "program management needs to be strengthened".

Corporate Asset Management has funding available in the 2018-19 branch budget for a position to support coordination of these asset management improvements, however due to an increase in the scope and complexity of improvement initiatives for the coming two (2) year period a higher level resource is required. Therefore additional funding of $20,000 is required.

The increase in scope and complexity for this position includes being the project manager for the re- development of the Asset Management Framework that has not been reviewed since 2009 and needs to be completely re-built to better support Asset Custodians in Transport & Infrastructure, Water & Waste, Lifestyle & Community and Organisational Services (Property Services) in managing the City's infrastructure asset base. This will include aligning with the International Standards for Asset Management that were first released five years ago, with there being a clear industry trend of large asset intensive organisations (including Water Utilities) adopting and implementing the International Standards to increase the level of rigour in managing infrastructure assets.

Coordination of Maintenance Management improvements - $140,000 Expenditure Unfavourable ______

Funding is requested for Coordination of Maintenance Management improvements across the organisation One (1) Full-time Temporary Position: Level 8 10-day fortnight for two (2) years.

Note: This position is required for two (2) years. Approval of funding via the March 2019 Revised Budget provides funding for the first year for this position. A further budget submission to be made via the 2020-21 budget process to fund the second year for this position.

The new integrated Maintenance Management System and associated field mobile computing solution were implemented as part of the ERP Project Release 2 go-live in May 2014. With the initial focus being on getting the basic maintenance practices in place for infrastructure and fleet assets.

A detailed maturity assessment of maintenance practices was recently completed that included Transport & Infrastructure, Water & Waste, Lifestyle & Community, Organisational Services (Property Services & Fleet). The maturity assessment identified 112 improvement opportunities that have potential to add substantial benefits across all of these areas and the associated road, drainage, water, sewer, parks and community building assets, including: - Further leveraging the capabilities of the Maintenance Management System that was implemented in 2014 - Recording better information on completed maintenance activities to inform future budgets and make decisions on the types of maintenance needed. - Improved planning and scheduling of maintenance works, so there is a better understanding of when work will be done, along with improving the ability to bundle up work to be done in a particular area resulting is less trips by work crews - Investigating options for better procurement arrangements for maintenance parts & materials, to get better deals for the City and potentially reduce travel time for work crews picking up parts & materials

The maturity assessment also highlighted why improving maintenance practices are important, as the City has: - Over one and half million infrastructure and fleet assets - A maintenance & operations field workforce of around 1000 staff with more than 500 mobile devices (i.e. iPADs) deployed to support maintenance & operations functions - Over a quarter of a million Work Orders are undertaken annually - A range of maintenance & operation functions undertaken through contracts with external providers.

This position is required to support Transport & Infrastructure, Water & Waste, Lifestyle & Community and Organisational Services (Property Services & Fleet) in improving maintenance practices through: - Provide information to the directors to inform the prioritisation of improvement initiatives, including information on the dependencies between improvement initiatives - Develop an overall implementation plan for improving maintenance practices - Coordinating the improvement initiatives identified in the recent maturity assessment that involve multiple directorates - Supporting the directorates with the collation and justification of ICT system needs/changes - Providing status reports to directors

Note: The Full-Time Temporary Level 8 Position for 18 months that undertook the detailed maturity assessment finished in February 2019. The requested position is a continuation of this work.

Enhancement of Asset & Maintenance Management ICT Systems - $150,000 Expenditure Unfavourable ______

Funding is requested for Enhancement of Asset & Maintenance Management ICT Systems.

As part of the ERP Project Release 2 the following Asset & Maintenance ICT Systems were implemented and went live in May 2014: - A consolidated Asset Register to record and manage asset data - The new integrated Maintenance Management System and associated field mobile computing work order management application

There are over 1.5 million infrastructure and fleet assets recorded in these ICT systems, with these ICT systems dispatching over a quarter of a million Work Orders annually (via 500 field mobile devices) to the City’s maintenance & operations field workforce of around 1000 staff

Since these systems went live five years ago, Asset Custodians and Maintenance areas in Transport & Infrastructure, Water & Waste, Lifestyle & Community and Organisational Services (Fleet & Property Services) have identified 23 different Asset & Maintenance Management ICT improvements needed to underpin delivery of asset based services to the community.

This funded is needed to support the directorates in progressing immediate priorities through: - Development of a project plan to deliver priority Asset & Maintenance Management ICT items - Providing a solution for capturing and storing information from asset defect & condition assessment field inspections for a range of asset types such as roads, bridges (including detailed structural inspections), pathways, retaining walls, playgrounds, electrical assets, etc. - Investigating option to provide external contractors with access to the City’s Maintenance Management System to ensure Work Orders can be quickly issued to external contractors and the details of work undertaken by the external contractors can be uploaded into the City’s Maintenance Management System.

The above items are key ICT capabilities that the directorates need to maintain the City’s assets and manage the risk associated with these assets.

Chain of Responsibility under Heavy Vehicle National Law - $100,000 Expenditure Unfavourable ______

$100,000 is requested to provide a temporary resource for 12 months to scope and develop the relevant procedures and supporting documents to comply with the Heavy Vehicle National Law.

In October 2018, the Heavy Vehicle National Law (HVNL) was amended to specify that every party in the heavy vehicle transport supply chain has a primary duty of care to ensure the safety of their transport activities. The supply chain typically includes the employer of a driver, the operator of the vehicle, a scheduler for the vehicle, a loading manager for any goods in the vehicle, loader and/or unloader of the vehicle, a consignor of any goods for transport by the vehicle, a consignee of any goods in the vehicle and a loader and/or unloader of any goods in the vehicle. In a prosecution, the courts may consider the actions of each party in the supply chain. This includes what measures those parties have in place to prevent breaches of the HVNL occurring. Each party in the chain must demonstrate to the Court that they took all reasonable steps to prevent the contravention or show the court that there were no steps they could reasonably be expected to have taken to prevent the contravention.

This requirement applies across various areas of Council, but specific examples include the transfer of waste by truck from recycle centres to landfill and the transport and delivery of plant and equipment to construction sites.

As with workplace health & safety, an effective safety management system will assist Council in complying with legislative obligations to meet the Heavy Vehicle National Law.

In order to address the legislation, a gap analysis is required to identify procedures that require development to meet the Heavy Vehicle National Law.

Major Events Support - $530,000 Expenditure Unfavourable and Revenue Favourable ______

As per the Council Resolutions, expenditure budget allocated to the following events by transferring funds from Events Reserve.

Eurovision (Australia Decides) - $150,000

Council resolved (G18.0921.018) that the Council will contribute a maximum of $150,000 with funding to be allocated from the Events Reserve.

Sport Accord - $300,000

City of Gold Coast will contribute $300,000 cash to support the Sport Accord Convention and this expenditure budget to be funded from Events Reserve (Council Resolution - G18.0814.019).

Combined Churches Easter Event - $80,000

Council resolved that the Council will provide one-off support to the 2019 Combined Churches Easter Celebrations to be held in April 2019 at the HOTA Outdoor Stage via Kind of support of up to $80,000, and the source of funds being the Events Reserve (G19.0130.028).

Transfer to Reserves - $350,000 Expenditure Unfavourable ______

Additional $350,000 revenue received from levy rates is requested to be transferred to the Reserve for allocation in the future budgets. The reason for the higher revenue received from levy than the anticipated revenue is due to increased number of rateable properties. This increase to expenditure budget is to be offset by an increase to revenue in Organisational Services Directorate. Therefore net nil impact to Council’s budget.

· Transfer to Parks and Recreational Reserve - $50,000 · Open Space Reserve - $75,000 · City Transport Improvement Separate Charges Reserve - $225,000

NCP adjustments to Business Units. ______

NCP Adjustments to Tourist Parks - $44,055 Net Revenue Unfavourable

Tax Equivalent - $255,127 Revenue Unfavourable

Tax Equivalent revenue receivable (30%) from Tourist Parks is reduced by $255,127. This is due to reduced profitability of the Parks as a consequence of lower revenues and additional maintenance costs.

Dividend - $211,072 Revenue Favourable

Dividend from Tourist Parks is increased by $211,072. Increase to dividend during the year is usually transferred to Tourist Park reserves, but considering the 2018-19 financial performance, the Tourist Parks business unit has opted to pay a dividend to Council to offset part of the reduction to Tax Equivalent revenue receivable.

NCP Adjustments to Water & Sewerage - $574,883 Revenue Unfavourable

Tax Equivalent - $574,833 Revenue Unfavourable

Tax Equivalent revenue (30%) from Water & Sewerage business unit is reduced by $574,883. Water and Sewerage business unit has recorded a number of budgetary changes throughout the financial year, this has resulted in a reduction to Tax Equivalent Revenue receivable (less than 1.5%) from Water & Sewerage business unit.

NCP Adjustments to Waste - $33,568 Revenue Unfavourable

Tax Equivalent - $33,568 Revenue Unfavourable

Tax Equivalent revenue (30%) from Waste Management is reduced by $33,568. As a result of the various budgetary changes recorded as part of the March 2019 budget review in Waste Management business unit, a minor reduction (less than 0.5%) to Tax Equivalent Revenue receivable from Waste Management. General Loan - $350,000 Revenue Favourable ______

General Loan borrowings to be increased by $350,000 to fund the sixth purchase of the MHA site at Kirra Tourist Park under special circumstances application.

Transfer to Tourist Park Reserve - $350,000 Expenditure Unfavourable ______

$350,000 requested to be transferred to Tourist Park Reserve to cover the capital expenditure associated with the Kirra Beach Tourist Park. This funding request is to purchase a property from a Kirra Beach Tourist Park resident under a special circumstances application as part of the MHA acquisition at Kirra Beach Tourist Park. This reserve transfer to fund the acquisition is funded from general loans.

Gold Coast Airport - ex gratia rates - $305,100 Revenue Favourable and Transfer to Cultural Precinct Reserve - $305,100 Expenditure Unfavourable ______

$305,100 revenue received from Gold Coast Airport (Ex Gratia Rates) for 2018-19 is requested to be transferred to Cultural Precinct Reserve as per Council Resolution G17.0517.007.Therefore nil impact to Council’s budget.

Transfer from Cultural Precinct Reserve - $1,423,000 Revenue Favourable ______

The funding plan for Stage 1A of the Cultural Precinct included $27 million of proceeds from land sales, much of which was received after the funds were required for the project. The project received a bridging loan from the Investment Fund Reserve to help manage the cash flow issues that this presented. The loan to the Investment Fund Reserve was scheduled to be repaid partly in 2018-19 and partly in 2019-20. The initial budget included the repayment to the Investment Fund Reserve but not the proceeds from the sale of properties, which have now all been transferred to the Cultural Precinct Reserve. This transfer from reserve is to provide the funding for the repayment to the Investment Fund Reserve. As the repayment was included in the initial budget, this transfer will have a favourable impact on the budget bottom line.

Review of Invoice Pending Account - $415,305 Revenue Favourable ______

The review of the Invoice Pending account (GRIR) has resulted in a credit balance of $415,305 in 2018-19 budget, Expenses are recognised against a cost centre / project when goods are received against a purchase order and this also results in a corresponding credit to the invoice pending liability account. The invoice pending liability account is reviewed on a regular basis for old outstanding purchase order receipts with no matching invoice and such receipts are reversed to clear the liability and correct the profit and loss. Where the purchase order receipt (expense) relates to a prior financial year, this results in a credit to revenue.

Workers’ Compensation Claims - $400,000 Expenditure Unfavourable & $400,000 Revenue Favourable ______

A review of the worker compensation claims expenditure as at 4 March 2019 indicates that there is an increase in estimated payments for 2018-19. Payments to 30-06-2019 are now expected to be approximately $5.46M (including overheads), therefore the Claims budget is requested to be increased by $400,000 and this increase is offset by a transfer of $400,000 from Workers’ Compensation Reserve.

The actuarial forecast of claim payments for the 2018-19 financial year totalled $4.661M. The budget including overheads (license fee, excess of loss insurance etc.) is $5.06M

Claim expenditure to date is $3.7M and includes a payment of $693,505 for a latent onset claim by a worker exposed to asbestos while an employee in 1980-90s. The Actuary did not forecast lodgement of a latent onset claim in 2018-19 but had made provision for latent onset claims in the reserve. Also expenditure on common law claims is expected to be higher than forecast due to a higher number of claims settled than expected.

The effect on the reserve is unknown at this time as our claim experience can be very volatile from year to year. It would be therefore be prudent to await the actuarial report due in July.

Insurance Premium - 796,977 Expenditure Favourable ______

The insurance premium expense budget reduced by $$796,977 as the actual premium paid for the year is less than the budget.

Insurance Claims budget - $157,400 Revenue Favourable ______

A net Revenue increase is required to Insurance Claims budget reimbursement account based on the trend for the rest of the financial year.

Temporary Administration and Project Officer (1 FTE) - $9,200 Expenditure Unfavourable ______

One Temporary Administration and Project Officer (Level 4 annual cost $82,900) is requested for 14 months.

$9,200 Expenditure increase is requested in this review to fund the 2 months labour cost. This increase to the expense budget will be offset by the increase to revenue from claims budget.

At the present time administrative support is provided by Legal Services. The Unit handles considerably more liability claims in-house thereby reducing the reliance on external lawyers as well as now being responsible for recovering from negligent Third Parties the cost of damaged Council infrastructure, such as traffic lights, road barriers etc. Both of these additional activities are financially benefiting Council.

The role of the Coordinator Insurance has been significantly expanded to include educational and mentoring activities designed to reduce claims and enhance the Captive’s financial performance, by reducing Council's risk profile.

The Administration and Project Officer will pick up the tasks currently performed by Legal Services and assist in the new initiatives.

The Insurance section has commenced the process to pursue recovery of damages to Council assets, $60,407 has been successfully recovered to-date, and further claims have been pursued and are pending payment by third parties.

Additional budget is not required as this position will be funded from additional funds recovered from third party recovery of damage to Council assets.

P3M Program - $109,000 Expenditure Unfavourable ______

The successful implementation of Project On-line for Water & Waste in late 2017-18 has provided the first cloud based portfolio, program and project management solution for the City. This solution provides real-time information on projects and remote access on mobile devices, so the solution can be used in the field. As Directorates transition their projects onto this new solution, two legacy city project management solutions (PMIS 2010 and Clarity) will be retired, providing real-time and timely information from a single source of truth for City projects. The implementation of this project is being delivered in 3 phases:

• Phase 1 - the solution went live late in 2017-18 and Water and Waste Directorate transitioned its project business onto the solution in August 2018. In 2018-19, the solution has supported both the planning and delivery of over 300 Water and Waste Directorate projects, with 300 solution users across the city.

• Phase 2 of the project in 2018-19 has focused on ensuring the solution provides the capability required to support the transition of the Transport & Infrastructure Directorate as well as all remaining Directorates planning and delivering infrastructure projects. The solution is expected to be ready to support Directorate transitions from 1 July 2019, with relevant Directorates transitioning through 2019-20.

Funding approved for Phase 2 of the project ($180,000) only provided for a part-time project manager in 2018-19 and the project has identified that additional resources are required to support the finalisation of this project phase, an additional $109,000. This additional funding requested will provide the project with a full- time specialist project manager (additional $85,000) and a part-time testing lead ($24,000). Both of these resources are highly technical and not available from business as usual resources. It is anticipated that implementation will be completed by 30 June 2019. Attachment 1 Page 134 • Phase 3 of the project in 2019-20 will focus on ensuring that the solution provides the capability to support all other project types (business change and technology). This final phase will complete the capability required to run all project types, enabling all remaining Directorates to transition their projects onto a single city solution. Funding includes a project manager (full-time - $290,000) and development/implementation PB_020costs for identifiedDirectors enhancements Report ($100,000). - March 2019 Budget Review

Program & Project Management of Asset Management Improvements - $20,000 Expenditure Unfavourable ______

Additional funding for program & project management of asset management improvements across the organisation One (1) Full-time Temporary Position: Level 8 10-day fortnight for two (2) years.

Note: Approval of funding via the March 2019 Revised Budget (along with funding already available in the Corporate Asset Management 2018-19 branch budget) provides funding for this position.

Further advancing asset management practices across the organisation is critical to ensure ongoing delivery of asset-based services to the community. The challenge of managing the City's large (nearly $19B) and diverse infrastructure asset base is increasing as the asset base continues to grow along with a large portion of the long life infrastructure aging and therefore needing a much greater asset management focus to manage risks and maintain service delivery.

The Asset Management Improvement Program is in place to support Asset Custodians in Transport & Infrastructure, Water & Waste, Lifestyle & Community & Organisational Services (Property Services) and the Corporate Asset Management branch in further advancing their asset management practices. The most recent detailed Asset Management Maturity Assessment identified 113 improvement opportunities, with the Asset Management Improvement Program now having over 600 identified initiatives/actions. These initiatives cover a wide range of improvements such as: - Improving integrity of and access to asset information to support a wide of business needs e.g. Asset Revaluations (and other Queensland Audit Office requirements), Asset Management Plans, various operational business functions, etc. - More rigour in identifying defects and undertaking condition assessments of assets - Ensuring all Asset Management Plans meet minimum requirements and are further advanced to optimise asset investment decision making - Further developing the organisation's asset management policies and frameworks to better enable management of asset based services

It is important to note that one of the seven key findings of the most recent Asset Management Maturity Assessment (conducted by specialist consultants) was "need to strengthen the whole-of-organisation approach to driving asset management improvements", including "program management needs to be strengthened".

Corporate Asset Management has funding available in the 2018-19 branch budget for a position to support coordination of these asset management improvements, however due to an increase in the scope and complexity of improvement initiatives for the coming two (2) year period a higher level resource is required. Therefore additional funding of $20,000 is required.

The increase in scope and complexity for this position includes being the project manager for the re- development of the Asset Management Framework that has not been reviewed since 2009 and needs to be completely re-built to better support Asset Custodians in Transport & Infrastructure, Water & Waste, Lifestyle & Community and Organisational Services (Property Services) in managing the City's infrastructure asset base. This will include aligning with the International Standards for Asset Management that were first released five years ago, with there being a clear industry trend of large asset intensive organisations (including Water Utilities) adopting and implementing the International Standards to increase the level of rigour in managing infrastructure assets.

Coordination of Maintenance Management improvements - $140,000 Expenditure Unfavourable ______

Funding is requested for Coordination of Maintenance Management improvements across the organisation One (1) Full-time Temporary Position: Level 8 10-day fortnight for two (2) years.

Note: This position is required for two (2) years. Approval of funding via the March 2019 Revised Budget provides funding for the first year for this position. A further budget submission to be made via the 2020-21 budget process to fund the second year for this position.

PB_020 BudgetThe new Review integrated - Directors Maintenance Report Management System and associatedCity of Gold field Coast-IN-CONFIDENCE mobile computing solution were Page : 11 of 23 implemented as part of the ERP Project Release 2 go-live in MayReport 2014. printed With theas atinitial 02-05-2019 focus being on gettingAbout this Report the basic maintenance practices in place for infrastructure and fleet assets.

A detailed maturity assessment of maintenance practices was recently completed that included Transport & Infrastructure, Water & Waste, Lifestyle & Community, Organisational Services (Property Services & Fleet). The maturity assessment identified 112 improvement opportunities that have potential to add substantial benefits across all of these areas and the associated road, drainage, water, sewer, parks and community building assets, including: - Further leveraging the capabilities of the Maintenance Management System that was implemented in 2014 - Recording better information on completed maintenance activities to inform future budgets and make decisions on the types of maintenance needed. - Improved planning and scheduling of maintenance works, so there is a better understanding of when work will be done, along with improving the ability to bundle up work to be done in a particular area resulting is less trips by work crews - Investigating options for better procurement arrangements for maintenance parts & materials, to get better deals for the City and potentially reduce travel time for work crews picking up parts & materials

The maturity assessment also highlighted why improving maintenance practices are important, as the City has: - Over one and half million infrastructure and fleet assets - A maintenance & operations field workforce of around 1000 staff with more than 500 mobile devices (i.e. iPADs) deployed to support maintenance & operations functions - Over a quarter of a million Work Orders are undertaken annually - A range of maintenance & operation functions undertaken through contracts with external providers.

This position is required to support Transport & Infrastructure, Water & Waste, Lifestyle & Community and Organisational Services (Property Services & Fleet) in improving maintenance practices through: - Provide information to the directors to inform the prioritisation of improvement initiatives, including information on the dependencies between improvement initiatives - Develop an overall implementation plan for improving maintenance practices - Coordinating the improvement initiatives identified in the recent maturity assessment that involve multiple directorates - Supporting the directorates with the collation and justification of ICT system needs/changes - Providing status reports to directors

Note: The Full-Time Temporary Level 8 Position for 18 months that undertook the detailed maturity assessment finished in February 2019. The requested position is a continuation of this work.

Enhancement of Asset & Maintenance Management ICT Systems - $150,000 Expenditure Unfavourable ______

Funding is requested for Enhancement of Asset & Maintenance Management ICT Systems.

As part of the ERP Project Release 2 the following Asset & Maintenance ICT Systems were implemented and went live in May 2014: - A consolidated Asset Register to record and manage asset data - The new integrated Maintenance Management System and associated field mobile computing work order management application

There are over 1.5 million infrastructure and fleet assets recorded in these ICT systems, with these ICT systems dispatching over a quarter of a million Work Orders annually (via 500 field mobile devices) to the City’s maintenance & operations field workforce of around 1000 staff

Since these systems went live five years ago, Asset Custodians and Maintenance areas in Transport & Infrastructure, Water & Waste, Lifestyle & Community and Organisational Services (Fleet & Property Services) have identified 23 different Asset & Maintenance Management ICT improvements needed to underpin delivery of asset based services to the community.

This funded is needed to support the directorates in progressing immediate priorities through: - Development of a project plan to deliver priority Asset & Maintenance Management ICT items - Providing a solution for capturing and storing information from asset defect & condition assessment field inspections for a range of asset types such as roads, bridges (including detailed structural inspections), pathways, retaining walls, playgrounds, electrical assets, etc. - Investigating option to provide external contractors with access to the City’s Maintenance Management System to ensure Work Orders can be quickly issued to external contractors and the details of work undertaken by the external contractors can be uploaded into the City’s Maintenance Management System.

The above items are key ICT capabilities that the directorates need to maintain the City’s assets and manage the risk associated with these assets.

Chain of Responsibility under Heavy Vehicle National Law - $100,000 Expenditure Unfavourable ______

$100,000 is requested to provide a temporary resource for 12 months to scope and develop the relevant procedures and supporting documents to comply with the Heavy Vehicle National Law.

In October 2018, the Heavy Vehicle National Law (HVNL) was amended to specify that every party in the heavy vehicle transport supply chain has a primary duty of care to ensure the safety of their transport activities. The supply chain typically includes the employer of a driver, the operator of the vehicle, a scheduler for the vehicle, a loading manager for any goods in the vehicle, loader and/or unloader of the vehicle, a consignor of any goods for transport by the vehicle, a consignee of any goods in the vehicle and a loader and/or unloader of any goods in the vehicle. In a prosecution, the courts may consider the actions of each party in the supply chain. This includes what measures those parties have in place to prevent breaches of the HVNL occurring. Each party in the chain must demonstrate to the Court that they took all reasonable steps to prevent the contravention or show the court that there were no steps they could reasonably be expected to have taken to prevent the contravention.

This requirement applies across various areas of Council, but specific examples include the transfer of waste by truck from recycle centres to landfill and the transport and delivery of plant and equipment to construction sites.

As with workplace health & safety, an effective safety management system will assist Council in complying with legislative obligations to meet the Heavy Vehicle National Law.

In order to address the legislation, a gap analysis is required to identify procedures that require development to meet the Heavy Vehicle National Law.

Major Events Support - $530,000 Expenditure Unfavourable and Revenue Favourable ______

As per the Council Resolutions, expenditure budget allocated to the following events by transferring funds from Events Reserve.

Eurovision (Australia Decides) - $150,000

Council resolved (G18.0921.018) that the Council will contribute a maximum of $150,000 with funding to be allocated from the Events Reserve.

Sport Accord - $300,000

City of Gold Coast will contribute $300,000 cash to support the Sport Accord Convention and this expenditure budget to be funded from Events Reserve (Council Resolution - G18.0814.019).

Combined Churches Easter Event - $80,000

Council resolved that the Council will provide one-off support to the 2019 Combined Churches Easter Celebrations to be held in April 2019 at the HOTA Outdoor Stage via Kind of support of up to $80,000, and the source of funds being the Events Reserve (G19.0130.028).

Transfer to Reserves - $350,000 Expenditure Unfavourable ______

Additional $350,000 revenue received from levy rates is requested to be transferred to the Reserve for allocation in the future budgets. The reason for the higher revenue received from levy than the anticipated revenue is due to increased number of rateable properties. This increase to expenditure budget is to be offset by an increase to revenue in Organisational Services Directorate. Therefore net nil impact to Council’s budget.

· Transfer to Parks and Recreational Reserve - $50,000 · Open Space Reserve - $75,000 · City Transport Improvement Separate Charges Reserve - $225,000

NCP adjustments to Business Units. ______

NCP Adjustments to Tourist Parks - $44,055 Net Revenue Unfavourable

Tax Equivalent - $255,127 Revenue Unfavourable

Tax Equivalent revenue receivable (30%) from Tourist Parks is reduced by $255,127. This is due to reduced profitability of the Parks as a consequence of lower revenues and additional maintenance costs.

Dividend - $211,072 Revenue Favourable

Dividend from Tourist Parks is increased by $211,072. Increase to dividend during the year is usually transferred to Tourist Park reserves, but considering the 2018-19 financial performance, the Tourist Parks business unit has opted to pay a dividend to Council to offset part of the reduction to Tax Equivalent revenue receivable.

NCP Adjustments to Water & Sewerage - $574,883 Revenue Unfavourable

Tax Equivalent - $574,833 Revenue Unfavourable

Tax Equivalent revenue (30%) from Water & Sewerage business unit is reduced by $574,883. Water and Sewerage business unit has recorded a number of budgetary changes throughout the financial year, this has resulted in a reduction to Tax Equivalent Revenue receivable (less than 1.5%) from Water & Sewerage business unit.

NCP Adjustments to Waste - $33,568 Revenue Unfavourable

Tax Equivalent - $33,568 Revenue Unfavourable

Tax Equivalent revenue (30%) from Waste Management is reduced by $33,568. As a result of the various budgetary changes recorded as part of the March 2019 budget review in Waste Management business unit, a minor reduction (less than 0.5%) to Tax Equivalent Revenue receivable from Waste Management. General Loan - $350,000 Revenue Favourable ______

General Loan borrowings to be increased by $350,000 to fund the sixth purchase of the MHA site at Kirra Tourist Park under special circumstances application.

Transfer to Tourist Park Reserve - $350,000 Expenditure Unfavourable ______

$350,000 requested to be transferred to Tourist Park Reserve to cover the capital expenditure associated with the Kirra Beach Tourist Park. This funding request is to purchase a property from a Kirra Beach Tourist Park resident under a special circumstances application as part of the MHA acquisition at Kirra Beach Tourist Park. This reserve transfer to fund the acquisition is funded from general loans.

Gold Coast Airport - ex gratia rates - $305,100 Revenue Favourable and Transfer to Cultural Precinct Reserve - $305,100 Expenditure Unfavourable ______

$305,100 revenue received from Gold Coast Airport (Ex Gratia Rates) for 2018-19 is requested to be transferred to Cultural Precinct Reserve as per Council Resolution G17.0517.007.Therefore nil impact to Council’s budget.

Transfer from Cultural Precinct Reserve - $1,423,000 Revenue Favourable ______

The funding plan for Stage 1A of the Cultural Precinct included $27 million of proceeds from land sales, much of which was received after the funds were required for the project. The project received a bridging loan from the Investment Fund Reserve to help manage the cash flow issues that this presented. The loan to the Investment Fund Reserve was scheduled to be repaid partly in 2018-19 and partly in 2019-20. The initial budget included the repayment to the Investment Fund Reserve but not the proceeds from the sale of properties, which have now all been transferred to the Cultural Precinct Reserve. This transfer from reserve is to provide the funding for the repayment to the Investment Fund Reserve. As the repayment was included in the initial budget, this transfer will have a favourable impact on the budget bottom line.

Review of Invoice Pending Account - $415,305 Revenue Favourable ______

The review of the Invoice Pending account (GRIR) has resulted in a credit balance of $415,305 in 2018-19 budget, Expenses are recognised against a cost centre / project when goods are received against a purchase order and this also results in a corresponding credit to the invoice pending liability account. The invoice pending liability account is reviewed on a regular basis for old outstanding purchase order receipts with no matching invoice and such receipts are reversed to clear the liability and correct the profit and loss. Where the purchase order receipt (expense) relates to a prior financial year, this results in a credit to revenue.

Workers’ Compensation Claims - $400,000 Expenditure Unfavourable & $400,000 Revenue Favourable ______

A review of the worker compensation claims expenditure as at 4 March 2019 indicates that there is an increase in estimated payments for 2018-19. Payments to 30-06-2019 are now expected to be approximately $5.46M (including overheads), therefore the Claims budget is requested to be increased by $400,000 and this increase is offset by a transfer of $400,000 from Workers’ Compensation Reserve.

The actuarial forecast of claim payments for the 2018-19 financial year totalled $4.661M. The budget including overheads (license fee, excess of loss insurance etc.) is $5.06M

Claim expenditure to date is $3.7M and includes a payment of $693,505 for a latent onset claim by a worker exposed to asbestos while an employee in 1980-90s. The Actuary did not forecast lodgement of a latent onset claim in 2018-19 but had made provision for latent onset claims in the reserve. Also expenditure on common law claims is expected to be higher than forecast due to a higher number of claims settled than expected.

The effect on the reserve is unknown at this time as our claim experience can be very volatile from year to year. It would be therefore be prudent to await the actuarial report due in July.

Insurance Premium - 796,977 Expenditure Favourable ______

The insurance premium expense budget reduced by $$796,977 as the actual premium paid for the year is less than the budget.

Insurance Claims budget - $157,400 Revenue Favourable ______

A net Revenue increase is required to Insurance Claims budget reimbursement account based on the trend for the rest of the financial year.

Temporary Administration and Project Officer (1 FTE) - $9,200 Expenditure Unfavourable ______

One Temporary Administration and Project Officer (Level 4 annual cost $82,900) is requested for 14 months.

$9,200 Expenditure increase is requested in this review to fund the 2 months labour cost. This increase to the expense budget will be offset by the increase to revenue from claims budget.

At the present time administrative support is provided by Legal Services. The Unit handles considerably more liability claims in-house thereby reducing the reliance on external lawyers as well as now being responsible for recovering from negligent Third Parties the cost of damaged Council infrastructure, such as traffic lights, road barriers etc. Both of these additional activities are financially benefiting Council.

The role of the Coordinator Insurance has been significantly expanded to include educational and mentoring activities designed to reduce claims and enhance the Captive’s financial performance, by reducing Council's risk profile.

The Administration and Project Officer will pick up the tasks currently performed by Legal Services and assist in the new initiatives.

The Insurance section has commenced the process to pursue recovery of damages to Council assets, $60,407 has been successfully recovered to-date, and further claims have been pursued and are pending payment by third parties.

Additional budget is not required as this position will be funded from additional funds recovered from third party recovery of damage to Council assets.

P3M Program - $109,000 Expenditure Unfavourable ______

The successful implementation of Project On-line for Water & Waste in late 2017-18 has provided the first cloud based portfolio, program and project management solution for the City. This solution provides real-time information on projects and remote access on mobile devices, so the solution can be used in the field. As Directorates transition their projects onto this new solution, two legacy city project management solutions (PMIS 2010 and Clarity) will be retired, providing real-time and timely information from a single source of truth for City projects. The implementation of this project is being delivered in 3 phases:

• Phase 1 - the solution went live late in 2017-18 and Water and Waste Directorate transitioned its project business onto the solution in August 2018. In 2018-19, the solution has supported both the planning and delivery of over 300 Water and Waste Directorate projects, with 300 solution users across the city.

• Phase 2 of the project in 2018-19 has focused on ensuring the solution provides the capability required to support the transition of the Transport & Infrastructure Directorate as well as all remaining Directorates planning and delivering infrastructure projects. The solution is expected to be ready to support Directorate transitions from 1 July 2019, with relevant Directorates transitioning through 2019-20.

Funding approved for Phase 2 of the project ($180,000) only provided for a part-time project manager in 2018-19 and the project has identified that additional resources are required to support the finalisation of this project phase, an additional $109,000. This additional funding requested will provide the project with a full- time specialist project manager (additional $85,000) and a part-time testing lead ($24,000). Both of these resources are highly technical and not available from business as usual resources. It is anticipated that implementation will be completed by 30 June 2019.

• Phase 3 of the project in 2019-20 will focus on ensuring that the solution provides the capability to support all other project types (business change and technology). This final phase will complete the capability required to run all project types, enabling all remaining Directorates to transition their projects onto a single city solution. Funding includes a project manager (full-time - $290,000) and development/implementation costs for identified enhancements ($100,000).

Program & Project Management of Asset Management Improvements - $20,000 Expenditure Unfavourable ______

Additional funding for program & project management of asset management improvements across the organisation One (1) Full-time Temporary Position: Level 8 10-day fortnight for two (2) years.

Note: Approval of funding via the March 2019 Revised Budget (along with funding already available in the Corporate Asset Management 2018-19 branch budget) provides funding for this position.

Further advancing asset management practices across the organisation is critical to ensure ongoing delivery of asset-based services to the community. The challenge of managing the City's large (nearly $19B) and diverse infrastructure asset base is increasing as the asset base continues to grow along with a large portion of the long life infrastructure aging and therefore needing a much greater asset management focus to manage risks and maintain service delivery.

The Asset Management Improvement Program is in place to support Asset Custodians in Transport & Infrastructure, Water & Waste, Lifestyle & Community & Organisational Services (Property Services) and the Corporate Asset Management branch in further advancing their asset management practices. The most recent detailed Asset Management Maturity Assessment identified 113 improvement opportunities, with the Asset Management Improvement Program now having over 600 identified initiatives/actions. These initiatives cover a wide range of improvements such as: - Improving integrity of and access to asset information to support a wide of business needs e.g. Asset Revaluations (and other Queensland Audit Office requirements), Asset Management Plans, various operational business functions, etc. - More rigour in identifying defects and undertaking condition assessments of assets - Ensuring all Asset Management Plans meet minimum requirements and are further advanced to optimise asset investment decision making - Further developing the organisation's asset management policies and frameworks to better enable management of asset based services

It is important to note that one of the seven key findings of the most recent Asset Management Maturity Assessment (conducted by specialist consultants) was "need to strengthen the whole-of-organisation approach to driving asset management improvements", including "program management needs to be strengthened".

Corporate Asset Management has funding available in the 2018-19 branch budget for a position to support coordination of these asset management improvements, however due to an increase in the scope and complexity of improvement initiatives for the coming two (2) year period a higher level resource is required. Therefore additional funding of $20,000 is required.

The increase in scope and complexity for this position includes being the project manager for the re- development of the Asset Management Framework that has not been reviewed since 2009 and needs to be completely re-built to better support Asset Custodians in Transport & Infrastructure, Water & Waste, Lifestyle & Community and Organisational Services (Property Services) in managing the City's infrastructure asset base. This will include aligning with the International Standards for Asset Management that were first released five years ago, with there being a clear industry trend of large asset intensive organisations (including Water Utilities) adopting and implementing the International Standards to increase the level of rigour in managing infrastructure assets.

Coordination of Maintenance Management improvements - $140,000 Expenditure Unfavourable ______

Funding is requested for Coordination of Maintenance Management improvements across the organisation Attachment 1 One (1) Full-time Temporary Position: Level 8 10-day fortnight for two (2) years. Page 135

Note: This position is required for two (2) years. Approval of funding via the March 2019 Revised Budget provides funding for the first year for this position. A further budget submission to be made via the 2020-21 PB_020budget process Directors to fund the secondReport year for - this March position. 2019 Budget Review

The new integrated Maintenance Management System and associated field mobile computing solution were implemented as part of the ERP Project Release 2 go-live in May 2014. With the initial focus being on getting the basic maintenance practices in place for infrastructure and fleet assets.

A detailed maturity assessment of maintenance practices was recently completed that included Transport & Infrastructure, Water & Waste, Lifestyle & Community, Organisational Services (Property Services & Fleet). The maturity assessment identified 112 improvement opportunities that have potential to add substantial benefits across all of these areas and the associated road, drainage, water, sewer, parks and community building assets, including: - Further leveraging the capabilities of the Maintenance Management System that was implemented in 2014 - Recording better information on completed maintenance activities to inform future budgets and make decisions on the types of maintenance needed. - Improved planning and scheduling of maintenance works, so there is a better understanding of when work will be done, along with improving the ability to bundle up work to be done in a particular area resulting is less trips by work crews - Investigating options for better procurement arrangements for maintenance parts & materials, to get better deals for the City and potentially reduce travel time for work crews picking up parts & materials

The maturity assessment also highlighted why improving maintenance practices are important, as the City has: - Over one and half million infrastructure and fleet assets - A maintenance & operations field workforce of around 1000 staff with more than 500 mobile devices (i.e. iPADs) deployed to support maintenance & operations functions - Over a quarter of a million Work Orders are undertaken annually - A range of maintenance & operation functions undertaken through contracts with external providers.

This position is required to support Transport & Infrastructure, Water & Waste, Lifestyle & Community and Organisational Services (Property Services & Fleet) in improving maintenance practices through: - Provide information to the directors to inform the prioritisation of improvement initiatives, including information on the dependencies between improvement initiatives - Develop an overall implementation plan for improving maintenance practices - Coordinating the improvement initiatives identified in the recent maturity assessment that involve multiple directorates - Supporting the directorates with the collation and justification of ICT system needs/changes - Providing status reports to directors

Note: The Full-Time Temporary Level 8 Position for 18 months that undertook the detailed maturity assessment finished in February 2019. The requested position is a continuation of this work.

Enhancement of Asset & Maintenance Management ICT Systems - $150,000 Expenditure Unfavourable ______

Funding is requested for Enhancement of Asset & Maintenance Management ICT Systems.

As part of the ERP Project Release 2 the following Asset & Maintenance ICT Systems were implemented and went live in May 2014: - A consolidated Asset Register to record and manage asset data - The new integrated Maintenance Management System and associated field mobile computing work order management application

There are over 1.5 million infrastructure and fleet assets recorded in these ICT systems, with these ICT systems dispatching over a quarter of a million Work Orders annually (via 500 field mobile devices) to the City’s maintenance & operations field workforce of around 1000 staff

Since these systems went live five years ago, Asset Custodians and Maintenance areas in Transport & Infrastructure, Water & Waste, Lifestyle & Community and Organisational Services (Fleet & Property Services) have identified 23 different Asset & Maintenance Management ICT improvements needed to underpin delivery of asset based services to the community.

PB_020 BudgetThis funded Review is - Directorsneeded toReport support the directorates in progressingCity immediate of Gold Coast-IN-CONFIDENCE priorities through: Page : 12 of 23 - Development of a project plan to deliver priority Asset & MaintenanceReport printed Management as at 02-05-2019 ICT items About this Report - Providing a solution for capturing and storing information from asset defect & condition assessment field inspections for a range of asset types such as roads, bridges (including detailed structural inspections), pathways, retaining walls, playgrounds, electrical assets, etc. - Investigating option to provide external contractors with access to the City’s Maintenance Management System to ensure Work Orders can be quickly issued to external contractors and the details of work undertaken by the external contractors can be uploaded into the City’s Maintenance Management System.

The above items are key ICT capabilities that the directorates need to maintain the City’s assets and manage the risk associated with these assets.

Chain of Responsibility under Heavy Vehicle National Law - $100,000 Expenditure Unfavourable ______

$100,000 is requested to provide a temporary resource for 12 months to scope and develop the relevant procedures and supporting documents to comply with the Heavy Vehicle National Law.

In October 2018, the Heavy Vehicle National Law (HVNL) was amended to specify that every party in the heavy vehicle transport supply chain has a primary duty of care to ensure the safety of their transport activities. The supply chain typically includes the employer of a driver, the operator of the vehicle, a scheduler for the vehicle, a loading manager for any goods in the vehicle, loader and/or unloader of the vehicle, a consignor of any goods for transport by the vehicle, a consignee of any goods in the vehicle and a loader and/or unloader of any goods in the vehicle. In a prosecution, the courts may consider the actions of each party in the supply chain. This includes what measures those parties have in place to prevent breaches of the HVNL occurring. Each party in the chain must demonstrate to the Court that they took all reasonable steps to prevent the contravention or show the court that there were no steps they could reasonably be expected to have taken to prevent the contravention.

This requirement applies across various areas of Council, but specific examples include the transfer of waste by truck from recycle centres to landfill and the transport and delivery of plant and equipment to construction sites.

As with workplace health & safety, an effective safety management system will assist Council in complying with legislative obligations to meet the Heavy Vehicle National Law.

In order to address the legislation, a gap analysis is required to identify procedures that require development to meet the Heavy Vehicle National Law.

Major Events Support - $530,000 Expenditure Unfavourable and Revenue Favourable ______

As per the Council Resolutions, expenditure budget allocated to the following events by transferring funds from Events Reserve.

Eurovision (Australia Decides) - $150,000

Council resolved (G18.0921.018) that the Council will contribute a maximum of $150,000 with funding to be allocated from the Events Reserve.

Sport Accord - $300,000

City of Gold Coast will contribute $300,000 cash to support the Sport Accord Convention and this expenditure budget to be funded from Events Reserve (Council Resolution - G18.0814.019).

Combined Churches Easter Event - $80,000

Council resolved that the Council will provide one-off support to the 2019 Combined Churches Easter Celebrations to be held in April 2019 at the HOTA Outdoor Stage via Kind of support of up to $80,000, and the source of funds being the Events Reserve (G19.0130.028).

Transfer to Reserves - $350,000 Expenditure Unfavourable ______

Additional $350,000 revenue received from levy rates is requested to be transferred to the Reserve for allocation in the future budgets. The reason for the higher revenue received from levy than the anticipated revenue is due to increased number of rateable properties. This increase to expenditure budget is to be offset by an increase to revenue in Organisational Services Directorate. Therefore net nil impact to Council’s budget.

· Transfer to Parks and Recreational Reserve - $50,000 · Open Space Reserve - $75,000 · City Transport Improvement Separate Charges Reserve - $225,000

NCP adjustments to Business Units. ______

NCP Adjustments to Tourist Parks - $44,055 Net Revenue Unfavourable

Tax Equivalent - $255,127 Revenue Unfavourable

Tax Equivalent revenue receivable (30%) from Tourist Parks is reduced by $255,127. This is due to reduced profitability of the Parks as a consequence of lower revenues and additional maintenance costs.

Dividend - $211,072 Revenue Favourable

Dividend from Tourist Parks is increased by $211,072. Increase to dividend during the year is usually transferred to Tourist Park reserves, but considering the 2018-19 financial performance, the Tourist Parks business unit has opted to pay a dividend to Council to offset part of the reduction to Tax Equivalent revenue receivable.

NCP Adjustments to Water & Sewerage - $574,883 Revenue Unfavourable

Tax Equivalent - $574,833 Revenue Unfavourable

Tax Equivalent revenue (30%) from Water & Sewerage business unit is reduced by $574,883. Water and Sewerage business unit has recorded a number of budgetary changes throughout the financial year, this has resulted in a reduction to Tax Equivalent Revenue receivable (less than 1.5%) from Water & Sewerage business unit.

NCP Adjustments to Waste - $33,568 Revenue Unfavourable

Tax Equivalent - $33,568 Revenue Unfavourable

Tax Equivalent revenue (30%) from Waste Management is reduced by $33,568. As a result of the various budgetary changes recorded as part of the March 2019 budget review in Waste Management business unit, a minor reduction (less than 0.5%) to Tax Equivalent Revenue receivable from Waste Management. General Loan - $350,000 Revenue Favourable ______

General Loan borrowings to be increased by $350,000 to fund the sixth purchase of the MHA site at Kirra Tourist Park under special circumstances application.

Transfer to Tourist Park Reserve - $350,000 Expenditure Unfavourable ______

$350,000 requested to be transferred to Tourist Park Reserve to cover the capital expenditure associated with the Kirra Beach Tourist Park. This funding request is to purchase a property from a Kirra Beach Tourist Park resident under a special circumstances application as part of the MHA acquisition at Kirra Beach Tourist Park. This reserve transfer to fund the acquisition is funded from general loans.

Gold Coast Airport - ex gratia rates - $305,100 Revenue Favourable and Transfer to Cultural Precinct Reserve - $305,100 Expenditure Unfavourable ______

$305,100 revenue received from Gold Coast Airport (Ex Gratia Rates) for 2018-19 is requested to be transferred to Cultural Precinct Reserve as per Council Resolution G17.0517.007.Therefore nil impact to Council’s budget.

Transfer from Cultural Precinct Reserve - $1,423,000 Revenue Favourable ______

The funding plan for Stage 1A of the Cultural Precinct included $27 million of proceeds from land sales, much of which was received after the funds were required for the project. The project received a bridging loan from the Investment Fund Reserve to help manage the cash flow issues that this presented. The loan to the Investment Fund Reserve was scheduled to be repaid partly in 2018-19 and partly in 2019-20. The initial budget included the repayment to the Investment Fund Reserve but not the proceeds from the sale of properties, which have now all been transferred to the Cultural Precinct Reserve. This transfer from reserve is to provide the funding for the repayment to the Investment Fund Reserve. As the repayment was included in the initial budget, this transfer will have a favourable impact on the budget bottom line.

Review of Invoice Pending Account - $415,305 Revenue Favourable ______

The review of the Invoice Pending account (GRIR) has resulted in a credit balance of $415,305 in 2018-19 budget, Expenses are recognised against a cost centre / project when goods are received against a purchase order and this also results in a corresponding credit to the invoice pending liability account. The invoice pending liability account is reviewed on a regular basis for old outstanding purchase order receipts with no matching invoice and such receipts are reversed to clear the liability and correct the profit and loss. Where the purchase order receipt (expense) relates to a prior financial year, this results in a credit to revenue.

Workers’ Compensation Claims - $400,000 Expenditure Unfavourable & $400,000 Revenue Favourable ______

A review of the worker compensation claims expenditure as at 4 March 2019 indicates that there is an increase in estimated payments for 2018-19. Payments to 30-06-2019 are now expected to be approximately $5.46M (including overheads), therefore the Claims budget is requested to be increased by $400,000 and this increase is offset by a transfer of $400,000 from Workers’ Compensation Reserve.

The actuarial forecast of claim payments for the 2018-19 financial year totalled $4.661M. The budget including overheads (license fee, excess of loss insurance etc.) is $5.06M

Claim expenditure to date is $3.7M and includes a payment of $693,505 for a latent onset claim by a worker exposed to asbestos while an employee in 1980-90s. The Actuary did not forecast lodgement of a latent onset claim in 2018-19 but had made provision for latent onset claims in the reserve. Also expenditure on common law claims is expected to be higher than forecast due to a higher number of claims settled than expected.

The effect on the reserve is unknown at this time as our claim experience can be very volatile from year to year. It would be therefore be prudent to await the actuarial report due in July.

Insurance Premium - 796,977 Expenditure Favourable ______

The insurance premium expense budget reduced by $$796,977 as the actual premium paid for the year is less than the budget.

Insurance Claims budget - $157,400 Revenue Favourable ______

A net Revenue increase is required to Insurance Claims budget reimbursement account based on the trend for the rest of the financial year.

Temporary Administration and Project Officer (1 FTE) - $9,200 Expenditure Unfavourable ______

One Temporary Administration and Project Officer (Level 4 annual cost $82,900) is requested for 14 months.

$9,200 Expenditure increase is requested in this review to fund the 2 months labour cost. This increase to the expense budget will be offset by the increase to revenue from claims budget.

At the present time administrative support is provided by Legal Services. The Unit handles considerably more liability claims in-house thereby reducing the reliance on external lawyers as well as now being responsible for recovering from negligent Third Parties the cost of damaged Council infrastructure, such as traffic lights, road barriers etc. Both of these additional activities are financially benefiting Council.

The role of the Coordinator Insurance has been significantly expanded to include educational and mentoring activities designed to reduce claims and enhance the Captive’s financial performance, by reducing Council's risk profile.

The Administration and Project Officer will pick up the tasks currently performed by Legal Services and assist in the new initiatives.

The Insurance section has commenced the process to pursue recovery of damages to Council assets, $60,407 has been successfully recovered to-date, and further claims have been pursued and are pending payment by third parties.

Additional budget is not required as this position will be funded from additional funds recovered from third party recovery of damage to Council assets.

P3M Program - $109,000 Expenditure Unfavourable ______

The successful implementation of Project On-line for Water & Waste in late 2017-18 has provided the first cloud based portfolio, program and project management solution for the City. This solution provides real-time information on projects and remote access on mobile devices, so the solution can be used in the field. As Directorates transition their projects onto this new solution, two legacy city project management solutions (PMIS 2010 and Clarity) will be retired, providing real-time and timely information from a single source of truth for City projects. The implementation of this project is being delivered in 3 phases:

• Phase 1 - the solution went live late in 2017-18 and Water and Waste Directorate transitioned its project business onto the solution in August 2018. In 2018-19, the solution has supported both the planning and delivery of over 300 Water and Waste Directorate projects, with 300 solution users across the city.

• Phase 2 of the project in 2018-19 has focused on ensuring the solution provides the capability required to support the transition of the Transport & Infrastructure Directorate as well as all remaining Directorates planning and delivering infrastructure projects. The solution is expected to be ready to support Directorate transitions from 1 July 2019, with relevant Directorates transitioning through 2019-20.

Funding approved for Phase 2 of the project ($180,000) only provided for a part-time project manager in 2018-19 and the project has identified that additional resources are required to support the finalisation of this project phase, an additional $109,000. This additional funding requested will provide the project with a full- time specialist project manager (additional $85,000) and a part-time testing lead ($24,000). Both of these resources are highly technical and not available from business as usual resources. It is anticipated that implementation will be completed by 30 June 2019.

• Phase 3 of the project in 2019-20 will focus on ensuring that the solution provides the capability to support all other project types (business change and technology). This final phase will complete the capability required to run all project types, enabling all remaining Directorates to transition their projects onto a single city solution. Funding includes a project manager (full-time - $290,000) and development/implementation costs for identified enhancements ($100,000).

Program & Project Management of Asset Management Improvements - $20,000 Expenditure Unfavourable ______

Additional funding for program & project management of asset management improvements across the organisation One (1) Full-time Temporary Position: Level 8 10-day fortnight for two (2) years.

Note: Approval of funding via the March 2019 Revised Budget (along with funding already available in the Corporate Asset Management 2018-19 branch budget) provides funding for this position.

Further advancing asset management practices across the organisation is critical to ensure ongoing delivery of asset-based services to the community. The challenge of managing the City's large (nearly $19B) and diverse infrastructure asset base is increasing as the asset base continues to grow along with a large portion of the long life infrastructure aging and therefore needing a much greater asset management focus to manage risks and maintain service delivery.

The Asset Management Improvement Program is in place to support Asset Custodians in Transport & Infrastructure, Water & Waste, Lifestyle & Community & Organisational Services (Property Services) and the Corporate Asset Management branch in further advancing their asset management practices. The most recent detailed Asset Management Maturity Assessment identified 113 improvement opportunities, with the Asset Management Improvement Program now having over 600 identified initiatives/actions. These initiatives cover a wide range of improvements such as: - Improving integrity of and access to asset information to support a wide of business needs e.g. Asset Revaluations (and other Queensland Audit Office requirements), Asset Management Plans, various operational business functions, etc. - More rigour in identifying defects and undertaking condition assessments of assets - Ensuring all Asset Management Plans meet minimum requirements and are further advanced to optimise asset investment decision making - Further developing the organisation's asset management policies and frameworks to better enable management of asset based services

It is important to note that one of the seven key findings of the most recent Asset Management Maturity Assessment (conducted by specialist consultants) was "need to strengthen the whole-of-organisation approach to driving asset management improvements", including "program management needs to be strengthened".

Corporate Asset Management has funding available in the 2018-19 branch budget for a position to support coordination of these asset management improvements, however due to an increase in the scope and complexity of improvement initiatives for the coming two (2) year period a higher level resource is required. Therefore additional funding of $20,000 is required.

The increase in scope and complexity for this position includes being the project manager for the re- development of the Asset Management Framework that has not been reviewed since 2009 and needs to be completely re-built to better support Asset Custodians in Transport & Infrastructure, Water & Waste, Lifestyle & Community and Organisational Services (Property Services) in managing the City's infrastructure asset base. This will include aligning with the International Standards for Asset Management that were first released five years ago, with there being a clear industry trend of large asset intensive organisations (including Water Utilities) adopting and implementing the International Standards to increase the level of rigour in managing infrastructure assets.

Coordination of Maintenance Management improvements - $140,000 Expenditure Unfavourable ______

Funding is requested for Coordination of Maintenance Management improvements across the organisation One (1) Full-time Temporary Position: Level 8 10-day fortnight for two (2) years.

Note: This position is required for two (2) years. Approval of funding via the March 2019 Revised Budget provides funding for the first year for this position. A further budget submission to be made via the 2020-21 budget process to fund the second year for this position.

The new integrated Maintenance Management System and associated field mobile computing solution were implemented as part of the ERP Project Release 2 go-live in May 2014. With the initial focus being on getting the basic maintenance practices in place for infrastructure and fleet assets.

A detailed maturity assessment of maintenance practices was recently completed that included Transport & Infrastructure, Water & Waste, Lifestyle & Community, Organisational Services (Property Services & Fleet). The maturity assessment identified 112 improvement opportunities that have potential to add substantial benefits across all of these areas and the associated road, drainage, water, sewer, parks and community building assets, including: - Further leveraging the capabilities of the Maintenance Management System that was implemented in 2014 - Recording better information on completed maintenance activities to inform future budgets and make decisions on the types of maintenance needed. - Improved planning and scheduling of maintenance works, so there is a better understanding of when work will be done, along with improving the ability to bundle up work to be done in a particular area resulting is less trips by work crews - Investigating options for better procurement arrangements for maintenance parts & materials, to get better deals for the City and potentially reduce travel time for work crews picking up parts & materials

The maturity assessment also highlighted why improving maintenance practices are important, as the City has: - Over one and half million infrastructure and fleet assets - A maintenance & operations field workforce of around 1000 staff with more than 500 mobile devices (i.e. iPADs) deployed to support maintenance & operations functions - Over a quarter of a million Work Orders are undertaken annually - A range of maintenance & operation functions undertaken through contracts with external providers.

This position is required to support Transport & Infrastructure, Water & Waste, Lifestyle & Community and Organisational Services (Property Services & Fleet) in improving maintenance practices through: - Provide information to the directors to inform the prioritisation of improvement initiatives, including information on the dependencies between improvement initiatives - Develop an overall implementation plan for improving maintenance practices - Coordinating the improvement initiatives identified in the recent maturity assessment that involve multiple directorates - Supporting the directorates with the collation and justification of ICT system needs/changes - Providing status reports to directors

Note: The Full-Time Temporary Level 8 Position for 18 months that undertook the detailed maturity assessment finished in February 2019. The requested position is a continuation of this work.

Enhancement of Asset & Maintenance Management ICT Systems - $150,000 Expenditure Unfavourable ______

Funding is requested for Enhancement of Asset & Maintenance Management ICT Systems.

As part of the ERP Project Release 2 the following Asset & Maintenance ICT Systems were implemented and went live in May 2014: - A consolidated Asset Register to record and manage asset data - The new integrated Maintenance Management System and associated field mobile computing work order management application

There are over 1.5 million infrastructure and fleet assets recorded in these ICT systems, with these ICT systems dispatching over a quarter of a million Work Orders annually (via 500 field mobile devices) to the City’s maintenance & operations field workforce of around 1000 staff

Since these systems went live five years ago, Asset Custodians and Maintenance areas in Transport & Attachment 1 Infrastructure, Water & Waste, Lifestyle & Community and Organisational Services (Fleet & Property Page 136 Services) have identified 23 different Asset & Maintenance Management ICT improvements needed to underpin delivery of asset based services to the community. PB_020 Directors Report - March 2019 Budget Review

This funded is needed to support the directorates in progressing immediate priorities through: - Development of a project plan to deliver priority Asset & Maintenance Management ICT items - Providing a solution for capturing and storing information from asset defect & condition assessment field inspections for a range of asset types such as roads, bridges (including detailed structural inspections), pathways, retaining walls, playgrounds, electrical assets, etc. - Investigating option to provide external contractors with access to the City’s Maintenance Management System to ensure Work Orders can be quickly issued to external contractors and the details of work undertaken by the external contractors can be uploaded into the City’s Maintenance Management System.

The above items are key ICT capabilities that the directorates need to maintain the City’s assets and manage the risk associated with these assets.

Chain of Responsibility under Heavy Vehicle National Law - $100,000 Expenditure Unfavourable ______

$100,000 is requested to provide a temporary resource for 12 months to scope and develop the relevant procedures and supporting documents to comply with the Heavy Vehicle National Law.

In October 2018, the Heavy Vehicle National Law (HVNL) was amended to specify that every party in the heavy vehicle transport supply chain has a primary duty of care to ensure the safety of their transport activities. The supply chain typically includes the employer of a driver, the operator of the vehicle, a scheduler for the vehicle, a loading manager for any goods in the vehicle, loader and/or unloader of the vehicle, a consignor of any goods for transport by the vehicle, a consignee of any goods in the vehicle and a loader and/or unloader of any goods in the vehicle. In a prosecution, the courts may consider the actions of each party in the supply chain. This includes what measures those parties have in place to prevent breaches of the HVNL occurring. Each party in the chain must demonstrate to the Court that they took all reasonable steps to prevent the contravention or show the court that there were no steps they could reasonably be expected to have taken to prevent the contravention.

This requirement applies across various areas of Council, but specific examples include the transfer of waste by truck from recycle centres to landfill and the transport and delivery of plant and equipment to construction sites.

As with workplace health & safety, an effective safety management system will assist Council in complying with legislative obligations to meet the Heavy Vehicle National Law.

In order to address the legislation, a gap analysis is required to identify procedures that require development to meet the Heavy Vehicle National Law.

Major Events Support - $530,000 Expenditure Unfavourable and Revenue Favourable ______

As per the Council Resolutions, expenditure budget allocated to the following events by transferring funds from Events Reserve.

Eurovision (Australia Decides) - $150,000

Council resolved (G18.0921.018) that the Council will contribute a maximum of $150,000 with funding to be allocated from the Events Reserve.

Sport Accord - $300,000

City of Gold Coast will contribute $300,000 cash to support the Sport Accord Convention and this expenditure budget to be funded from Events Reserve (Council Resolution - G18.0814.019).

PB_020 BudgetCombined Review Churches - Directors Easter Report Event - $80,000 City of Gold Coast-IN-CONFIDENCE Page : 13 of 23 Report printed as at 02-05-2019 About this Report Council resolved that the Council will provide one-off support to the 2019 Combined Churches Easter Celebrations to be held in April 2019 at the HOTA Outdoor Stage via Kind of support of up to $80,000, and the source of funds being the Events Reserve (G19.0130.028).

Transfer to Reserves - $350,000 Expenditure Unfavourable ______

Additional $350,000 revenue received from levy rates is requested to be transferred to the Reserve for allocation in the future budgets. The reason for the higher revenue received from levy than the anticipated revenue is due to increased number of rateable properties. This increase to expenditure budget is to be offset by an increase to revenue in Organisational Services Directorate. Therefore net nil impact to Council’s budget.

· Transfer to Parks and Recreational Reserve - $50,000 · Open Space Reserve - $75,000 · City Transport Improvement Separate Charges Reserve - $225,000

NCP adjustments to Business Units. ______

NCP Adjustments to Tourist Parks - $44,055 Net Revenue Unfavourable

Tax Equivalent - $255,127 Revenue Unfavourable

Tax Equivalent revenue receivable (30%) from Tourist Parks is reduced by $255,127. This is due to reduced profitability of the Parks as a consequence of lower revenues and additional maintenance costs.

Dividend - $211,072 Revenue Favourable

Dividend from Tourist Parks is increased by $211,072. Increase to dividend during the year is usually transferred to Tourist Park reserves, but considering the 2018-19 financial performance, the Tourist Parks business unit has opted to pay a dividend to Council to offset part of the reduction to Tax Equivalent revenue receivable.

NCP Adjustments to Water & Sewerage - $574,883 Revenue Unfavourable

Tax Equivalent - $574,833 Revenue Unfavourable

Tax Equivalent revenue (30%) from Water & Sewerage business unit is reduced by $574,883. Water and Sewerage business unit has recorded a number of budgetary changes throughout the financial year, this has resulted in a reduction to Tax Equivalent Revenue receivable (less than 1.5%) from Water & Sewerage business unit.

NCP Adjustments to Waste - $33,568 Revenue Unfavourable

Tax Equivalent - $33,568 Revenue Unfavourable

Tax Equivalent revenue (30%) from Waste Management is reduced by $33,568. As a result of the various budgetary changes recorded as part of the March 2019 budget review in Waste Management business unit, a minor reduction (less than 0.5%) to Tax Equivalent Revenue receivable from Waste Management. General Loan - $350,000 Revenue Favourable ______

General Loan borrowings to be increased by $350,000 to fund the sixth purchase of the MHA site at Kirra Tourist Park under special circumstances application.

Transfer to Tourist Park Reserve - $350,000 Expenditure Unfavourable ______

$350,000 requested to be transferred to Tourist Park Reserve to cover the capital expenditure associated with the Kirra Beach Tourist Park. This funding request is to purchase a property from a Kirra Beach Tourist Park resident under a special circumstances application as part of the MHA acquisition at Kirra Beach Tourist Park. This reserve transfer to fund the acquisition is funded from general loans.

Gold Coast Airport - ex gratia rates - $305,100 Revenue Favourable and Transfer to Cultural Precinct Reserve - $305,100 Expenditure Unfavourable ______

$305,100 revenue received from Gold Coast Airport (Ex Gratia Rates) for 2018-19 is requested to be transferred to Cultural Precinct Reserve as per Council Resolution G17.0517.007.Therefore nil impact to Council’s budget.

Transfer from Cultural Precinct Reserve - $1,423,000 Revenue Favourable ______

The funding plan for Stage 1A of the Cultural Precinct included $27 million of proceeds from land sales, much of which was received after the funds were required for the project. The project received a bridging loan from the Investment Fund Reserve to help manage the cash flow issues that this presented. The loan to the Investment Fund Reserve was scheduled to be repaid partly in 2018-19 and partly in 2019-20. The initial budget included the repayment to the Investment Fund Reserve but not the proceeds from the sale of properties, which have now all been transferred to the Cultural Precinct Reserve. This transfer from reserve is to provide the funding for the repayment to the Investment Fund Reserve. As the repayment was included in the initial budget, this transfer will have a favourable impact on the budget bottom line.

Review of Invoice Pending Account - $415,305 Revenue Favourable ______

The review of the Invoice Pending account (GRIR) has resulted in a credit balance of $415,305 in 2018-19 budget, Expenses are recognised against a cost centre / project when goods are received against a purchase order and this also results in a corresponding credit to the invoice pending liability account. The invoice pending liability account is reviewed on a regular basis for old outstanding purchase order receipts with no matching invoice and such receipts are reversed to clear the liability and correct the profit and loss. Where the purchase order receipt (expense) relates to a prior financial year, this results in a credit to revenue.

Workers’ Compensation Claims - $400,000 Expenditure Unfavourable & $400,000 Revenue Favourable ______

A review of the worker compensation claims expenditure as at 4 March 2019 indicates that there is an increase in estimated payments for 2018-19. Payments to 30-06-2019 are now expected to be approximately $5.46M (including overheads), therefore the Claims budget is requested to be increased by $400,000 and this increase is offset by a transfer of $400,000 from Workers’ Compensation Reserve.

The actuarial forecast of claim payments for the 2018-19 financial year totalled $4.661M. The budget including overheads (license fee, excess of loss insurance etc.) is $5.06M

Claim expenditure to date is $3.7M and includes a payment of $693,505 for a latent onset claim by a worker exposed to asbestos while an employee in 1980-90s. The Actuary did not forecast lodgement of a latent onset claim in 2018-19 but had made provision for latent onset claims in the reserve. Also expenditure on common law claims is expected to be higher than forecast due to a higher number of claims settled than expected.

The effect on the reserve is unknown at this time as our claim experience can be very volatile from year to year. It would be therefore be prudent to await the actuarial report due in July.

Insurance Premium - 796,977 Expenditure Favourable ______

The insurance premium expense budget reduced by $$796,977 as the actual premium paid for the year is less than the budget.

Insurance Claims budget - $157,400 Revenue Favourable ______

A net Revenue increase is required to Insurance Claims budget reimbursement account based on the trend for the rest of the financial year.

Temporary Administration and Project Officer (1 FTE) - $9,200 Expenditure Unfavourable ______

One Temporary Administration and Project Officer (Level 4 annual cost $82,900) is requested for 14 months.

$9,200 Expenditure increase is requested in this review to fund the 2 months labour cost. This increase to the expense budget will be offset by the increase to revenue from claims budget.

At the present time administrative support is provided by Legal Services. The Unit handles considerably more liability claims in-house thereby reducing the reliance on external lawyers as well as now being responsible for recovering from negligent Third Parties the cost of damaged Council infrastructure, such as traffic lights, road barriers etc. Both of these additional activities are financially benefiting Council.

The role of the Coordinator Insurance has been significantly expanded to include educational and mentoring activities designed to reduce claims and enhance the Captive’s financial performance, by reducing Council's risk profile.

The Administration and Project Officer will pick up the tasks currently performed by Legal Services and assist in the new initiatives.

The Insurance section has commenced the process to pursue recovery of damages to Council assets, $60,407 has been successfully recovered to-date, and further claims have been pursued and are pending payment by third parties.

Additional budget is not required as this position will be funded from additional funds recovered from third party recovery of damage to Council assets.

P3M Program - $109,000 Expenditure Unfavourable ______

The successful implementation of Project On-line for Water & Waste in late 2017-18 has provided the first cloud based portfolio, program and project management solution for the City. This solution provides real-time information on projects and remote access on mobile devices, so the solution can be used in the field. As Directorates transition their projects onto this new solution, two legacy city project management solutions (PMIS 2010 and Clarity) will be retired, providing real-time and timely information from a single source of truth for City projects. The implementation of this project is being delivered in 3 phases:

• Phase 1 - the solution went live late in 2017-18 and Water and Waste Directorate transitioned its project business onto the solution in August 2018. In 2018-19, the solution has supported both the planning and delivery of over 300 Water and Waste Directorate projects, with 300 solution users across the city.

• Phase 2 of the project in 2018-19 has focused on ensuring the solution provides the capability required to support the transition of the Transport & Infrastructure Directorate as well as all remaining Directorates planning and delivering infrastructure projects. The solution is expected to be ready to support Directorate transitions from 1 July 2019, with relevant Directorates transitioning through 2019-20.

Funding approved for Phase 2 of the project ($180,000) only provided for a part-time project manager in 2018-19 and the project has identified that additional resources are required to support the finalisation of this project phase, an additional $109,000. This additional funding requested will provide the project with a full- time specialist project manager (additional $85,000) and a part-time testing lead ($24,000). Both of these resources are highly technical and not available from business as usual resources. It is anticipated that implementation will be completed by 30 June 2019.

• Phase 3 of the project in 2019-20 will focus on ensuring that the solution provides the capability to support all other project types (business change and technology). This final phase will complete the capability required to run all project types, enabling all remaining Directorates to transition their projects onto a single city solution. Funding includes a project manager (full-time - $290,000) and development/implementation costs for identified enhancements ($100,000).

Program & Project Management of Asset Management Improvements - $20,000 Expenditure Unfavourable ______

Additional funding for program & project management of asset management improvements across the organisation One (1) Full-time Temporary Position: Level 8 10-day fortnight for two (2) years.

Note: Approval of funding via the March 2019 Revised Budget (along with funding already available in the Corporate Asset Management 2018-19 branch budget) provides funding for this position.

Further advancing asset management practices across the organisation is critical to ensure ongoing delivery of asset-based services to the community. The challenge of managing the City's large (nearly $19B) and diverse infrastructure asset base is increasing as the asset base continues to grow along with a large portion of the long life infrastructure aging and therefore needing a much greater asset management focus to manage risks and maintain service delivery.

The Asset Management Improvement Program is in place to support Asset Custodians in Transport & Infrastructure, Water & Waste, Lifestyle & Community & Organisational Services (Property Services) and the Corporate Asset Management branch in further advancing their asset management practices. The most recent detailed Asset Management Maturity Assessment identified 113 improvement opportunities, with the Asset Management Improvement Program now having over 600 identified initiatives/actions. These initiatives cover a wide range of improvements such as: - Improving integrity of and access to asset information to support a wide of business needs e.g. Asset Revaluations (and other Queensland Audit Office requirements), Asset Management Plans, various operational business functions, etc. - More rigour in identifying defects and undertaking condition assessments of assets - Ensuring all Asset Management Plans meet minimum requirements and are further advanced to optimise asset investment decision making - Further developing the organisation's asset management policies and frameworks to better enable management of asset based services

It is important to note that one of the seven key findings of the most recent Asset Management Maturity Assessment (conducted by specialist consultants) was "need to strengthen the whole-of-organisation approach to driving asset management improvements", including "program management needs to be strengthened".

Corporate Asset Management has funding available in the 2018-19 branch budget for a position to support coordination of these asset management improvements, however due to an increase in the scope and complexity of improvement initiatives for the coming two (2) year period a higher level resource is required. Therefore additional funding of $20,000 is required.

The increase in scope and complexity for this position includes being the project manager for the re- development of the Asset Management Framework that has not been reviewed since 2009 and needs to be completely re-built to better support Asset Custodians in Transport & Infrastructure, Water & Waste, Lifestyle & Community and Organisational Services (Property Services) in managing the City's infrastructure asset base. This will include aligning with the International Standards for Asset Management that were first released five years ago, with there being a clear industry trend of large asset intensive organisations (including Water Utilities) adopting and implementing the International Standards to increase the level of rigour in managing infrastructure assets.

Coordination of Maintenance Management improvements - $140,000 Expenditure Unfavourable ______

Funding is requested for Coordination of Maintenance Management improvements across the organisation One (1) Full-time Temporary Position: Level 8 10-day fortnight for two (2) years.

Note: This position is required for two (2) years. Approval of funding via the March 2019 Revised Budget provides funding for the first year for this position. A further budget submission to be made via the 2020-21 budget process to fund the second year for this position.

The new integrated Maintenance Management System and associated field mobile computing solution were implemented as part of the ERP Project Release 2 go-live in May 2014. With the initial focus being on getting the basic maintenance practices in place for infrastructure and fleet assets.

A detailed maturity assessment of maintenance practices was recently completed that included Transport & Infrastructure, Water & Waste, Lifestyle & Community, Organisational Services (Property Services & Fleet). The maturity assessment identified 112 improvement opportunities that have potential to add substantial benefits across all of these areas and the associated road, drainage, water, sewer, parks and community building assets, including: - Further leveraging the capabilities of the Maintenance Management System that was implemented in 2014 - Recording better information on completed maintenance activities to inform future budgets and make decisions on the types of maintenance needed. - Improved planning and scheduling of maintenance works, so there is a better understanding of when work will be done, along with improving the ability to bundle up work to be done in a particular area resulting is less trips by work crews - Investigating options for better procurement arrangements for maintenance parts & materials, to get better deals for the City and potentially reduce travel time for work crews picking up parts & materials

The maturity assessment also highlighted why improving maintenance practices are important, as the City has: - Over one and half million infrastructure and fleet assets - A maintenance & operations field workforce of around 1000 staff with more than 500 mobile devices (i.e. iPADs) deployed to support maintenance & operations functions - Over a quarter of a million Work Orders are undertaken annually - A range of maintenance & operation functions undertaken through contracts with external providers.

This position is required to support Transport & Infrastructure, Water & Waste, Lifestyle & Community and Organisational Services (Property Services & Fleet) in improving maintenance practices through: - Provide information to the directors to inform the prioritisation of improvement initiatives, including information on the dependencies between improvement initiatives - Develop an overall implementation plan for improving maintenance practices - Coordinating the improvement initiatives identified in the recent maturity assessment that involve multiple directorates - Supporting the directorates with the collation and justification of ICT system needs/changes - Providing status reports to directors

Note: The Full-Time Temporary Level 8 Position for 18 months that undertook the detailed maturity assessment finished in February 2019. The requested position is a continuation of this work.

Enhancement of Asset & Maintenance Management ICT Systems - $150,000 Expenditure Unfavourable ______

Funding is requested for Enhancement of Asset & Maintenance Management ICT Systems.

As part of the ERP Project Release 2 the following Asset & Maintenance ICT Systems were implemented and went live in May 2014: - A consolidated Asset Register to record and manage asset data - The new integrated Maintenance Management System and associated field mobile computing work order management application

There are over 1.5 million infrastructure and fleet assets recorded in these ICT systems, with these ICT systems dispatching over a quarter of a million Work Orders annually (via 500 field mobile devices) to the City’s maintenance & operations field workforce of around 1000 staff

Since these systems went live five years ago, Asset Custodians and Maintenance areas in Transport & Infrastructure, Water & Waste, Lifestyle & Community and Organisational Services (Fleet & Property Services) have identified 23 different Asset & Maintenance Management ICT improvements needed to underpin delivery of asset based services to the community.

This funded is needed to support the directorates in progressing immediate priorities through: - Development of a project plan to deliver priority Asset & Maintenance Management ICT items - Providing a solution for capturing and storing information from asset defect & condition assessment field inspections for a range of asset types such as roads, bridges (including detailed structural inspections), pathways, retaining walls, playgrounds, electrical assets, etc. - Investigating option to provide external contractors with access to the City’s Maintenance Management System to ensure Work Orders can be quickly issued to external contractors and the details of work undertaken by the external contractors can be uploaded into the City’s Maintenance Management System.

The above items are key ICT capabilities that the directorates need to maintain the City’s assets and manage the risk associated with these assets.

Chain of Responsibility under Heavy Vehicle National Law - $100,000 Expenditure Unfavourable ______

$100,000 is requested to provide a temporary resource for 12 months to scope and develop the relevant procedures and supporting documents to comply with the Heavy Vehicle National Law.

In October 2018, the Heavy Vehicle National Law (HVNL) was amended to specify that every party in the heavy vehicle transport supply chain has a primary duty of care to ensure the safety of their transport activities. The supply chain typically includes the employer of a driver, the operator of the vehicle, a scheduler for the vehicle, a loading manager for any goods in the vehicle, loader and/or unloader of the vehicle, a consignor of any goods for transport by the vehicle, a consignee of any goods in the vehicle and a loader and/or unloader of any goods in the vehicle. In a prosecution, the courts may consider the actions of each party in the supply chain. This includes what measures those parties have in place to prevent breaches of the HVNL occurring. Each party in the chain must demonstrate to the Court that they took all reasonable steps to prevent the contravention or show the court that there were no steps they could reasonably be expected to have taken to prevent the contravention.

This requirement applies across various areas of Council, but specific examples include the transfer of waste by truck from recycle centres to landfill and the transport and delivery of plant and equipment to construction sites.

As with workplace health & safety, an effective safety management system will assist Council in complying with legislative obligations to meet the Heavy Vehicle National Law.

In order to address the legislation, a gap analysis is required to identify procedures that require development to meet the Heavy Vehicle National Law.

Major Events Support - $530,000 Expenditure Unfavourable and Revenue Favourable ______

As per the Council Resolutions, expenditure budget allocated to the following events by transferring funds from Events Reserve.

Eurovision (Australia Decides) - $150,000

Council resolved (G18.0921.018) that the Council will contribute a maximum of $150,000 with funding to be allocated from the Events Reserve.

Sport Accord - $300,000 Attachment 1 Page 137 City of Gold Coast will contribute $300,000 cash to support the Sport Accord Convention and this expenditure budget to be funded from Events Reserve (Council Resolution - G18.0814.019). PB_020 Directors Report - March 2019 Budget Review

Combined Churches Easter Event - $80,000

Council resolved that the Council will provide one-off support to the 2019 Combined Churches Easter Celebrations to be held in April 2019 at the HOTA Outdoor Stage via Kind of support of up to $80,000, and the source of funds being the Events Reserve (G19.0130.028).

Transfer to Reserves - $350,000 Expenditure Unfavourable ______

Additional $350,000 revenue received from levy rates is requested to be transferred to the Reserve for allocation in the future budgets. The reason for the higher revenue received from levy than the anticipated revenue is due to increased number of rateable properties. This increase to expenditure budget is to be offset by an increase to revenue in Organisational Services Directorate. Therefore net nil impact to Council’s budget.

· Transfer to Parks and Recreational Reserve - $50,000 · Open Space Reserve - $75,000 · City Transport Improvement Separate Charges Reserve - $225,000

NCP adjustments to Business Units. ______

NCP Adjustments to Tourist Parks - $44,055 Net Revenue Unfavourable

Tax Equivalent - $255,127 Revenue Unfavourable

Tax Equivalent revenue receivable (30%) from Tourist Parks is reduced by $255,127. This is due to reduced profitability of the Parks as a consequence of lower revenues and additional maintenance costs.

Dividend - $211,072 Revenue Favourable

Dividend from Tourist Parks is increased by $211,072. Increase to dividend during the year is usually transferred to Tourist Park reserves, but considering the 2018-19 financial performance, the Tourist Parks business unit has opted to pay a dividend to Council to offset part of the reduction to Tax Equivalent revenue receivable.

NCP Adjustments to Water & Sewerage - $574,883 Revenue Unfavourable

Tax Equivalent - $574,833 Revenue Unfavourable

Tax Equivalent revenue (30%) from Water & Sewerage business unit is reduced by $574,883. Water and Sewerage business unit has recorded a number of budgetary changes throughout the financial year, this has resulted in a reduction to Tax Equivalent Revenue receivable (less than 1.5%) from Water & Sewerage business unit.

NCP Adjustments to Waste - $33,568 Revenue Unfavourable

Tax Equivalent - $33,568 Revenue Unfavourable

Tax Equivalent revenue (30%) from Waste Management is reduced by $33,568. As a result of the various budgetary changes recorded as part of the March 2019 budget review in Waste Management business unit, a minor reduction (less than 0.5%) to Tax Equivalent Revenue receivable from Waste Management.

Future Budget Trends

PB_020 Budget Review - Directors Report City of Gold Coast-IN-CONFIDENCE Page : 14 of 23 Report printed as at 02-05-2019 About this Report Attachment 1 Page 138

PB_020 Directors Report - March 2019 Budget Review

Office of the Chief Operating Officer - Joe McCabe DATE

PB_020 Budget Review - Directors Report City of Gold Coast-IN-CONFIDENCE Page : 15 of 23 Report printed as at 02-05-2019 About this Report Attachment 1 Page 139

PB_020 Directors Report - March 2019 Budget Review

Directorate: Organisational Services

Recurrent Non-Recurrent Total Review Review Review (Fav)/Unfav (Fav)/Unfav (Fav)/Unfav Expenses 0 1,325,633 1,325,633 Revenue 0 (1,692,906) (1,692,906) Net Directorate Variations 0 (367,273) (367,273)

Budget Review Categories Directorate Variations Recurrent Non-Recurrent Total Review Review Review (Fav)/Unfav (Fav)/Unfav (Fav)/Unfav General Review - Mar 19 0 (350,000) (350,000) Intra Directorate - Mar 19 0 0 0 Net Directorate Variations 0 (350,000) (350,000)

Inter-Directorate Variations (Balanced between Directorates) Inter Directorate - Mar 19 0 (17,273) (17,273) Total Net Directorate Variations 0 (367,273) (367,273)

Directorate Variations - Comments on Major Variations

TRANSFER FROM FLEET RESERVE - NIL IMPACT

$1,200,000 Transfer from Fleet Renewal and Purchase Reserve A rise in operational costs, in particular fuel costs, and a reduction in labour recovery revenue resulting from the re-calculation of recoverable hours in the workshops and operational areas has resulted in an increase in expenditure. These costs, totalling $1,200,000, are proposed to be absorbed through a transfer from the Fleet Renewal & Purchase Reserve. ------

MAJOR BUDGET REVIEW VARIATIONS

Depot Operations - $620,000 Favourable Funds are not required this year for facilities maintenance at Tugun, Coomera, Carrara and Miami as future depot plans have not been confirmed. Works are scheduled for the 2019-20 financial year and include repairs to existing buildings, hardstands, access and fencing. Funding for assets audits is also not required as only partial audits will be carried out this financial year. These will be carried out in 2019-20 to supply condition ratings for individual assets which will be used to determine more accurate lifecycle budgets.

Debt Recovery Rates - $335,000 Net Favourable $1,335,000 Expenditure Decrease. Delays have been experienced with commencing the advanced recovery activity for rate debt. These delays result in lower than expected expenditure being incurred this financial year. $1,000,000 Revenue Decrease. The expenditure associated with advanced rate recovery activity is significantly lower than expected due to a delayed start to this process. As the amount of revenue is directly related to the expenditure incurred, the revenue will also be lower than expected.

Property Search fee revenue - $200,000 Favourable Property search fee revenue has increased due to an increasing trend in search requests.

Customer Contact Search fee revenue - $147,000 Favourable An increasing trend in search requests assumes there will be an increase in property sales and consequently, an increase in property transfer fee revenue.

Australia Post processing fees - $120,000 Favourable There has been a lower than expected number of payments made to Australia Post in relation to Council accounts.

PB_020 Budget Review - Directors Report City of Gold Coast-IN-CONFIDENCE Page : 16 of 23 City Transport Improvement Separate Charge - $225,000 FavourableReport printed as at 02-05-2019 About this Report Open Space Maintenance & Enhancement Separate Charge - $75,000 Favourable Recreational Space Separate Charge - $50,000 Favourable Higher than anticipated revenue for the above separate charges due to increased number of rateable properties.

Online Timesheeting project - Nil impact. $722,000 Expenditure Increase & $722,000 Revenue Increase. A project is currently underway to implement an online timesheeting solution (TA21) which will be integrated with our existing payroll software provided by Frontier. This additional module will attract an annual maintenance fee of $54,000 (Refer OS7960O002). Implementation is scheduled to commence in late 2019/ early 2020. It is expected that these costs will be offset by savings across Council as we transition from a paper-based process to an online solution, with the financial benefits commencing in July 2021. Funded from the Investment Fund Reserve, subject to repayment via bankable benefits.

Skilling Queenslanders for Work grant - Nil impact. $260,000 Revenue Increase & $260,000 Expenditure Increase. Skilling Queenslanders for Work is a continuing Queensland Government program that attracts subsidies to the City for employing people from the target group - school leavers and other young people, Aboriginal and Torres Strait people, people with disability, women re-entering the workforce and veterans and ex service personnel. The City can apply for subsidies of up to $26,000 per trainee with a contribution of $4000 from the business to engage a trainee for a six month period. The state provides $15,000 through its First Start initiative alongside the Australian Government subsidy of $11,000 (Work Start $10,000 and PaTH $1000). Respective directorates/branches will contribute $4000 per individual engaged from existing budgets together with other minor costs of engaging the individuals e.g. PPE. To maximise benefits to the City, it is anticipated that twenty (20) traineeship positions can be created for the City to manage multiple cohorts of trainees over the life of the program which, at this stage, ends in 2021. For 2019-20, revenue of $260,000 for government subsidies will be offset by $260,000 expenses associated with trainee wages. Other costs will be borne by the business.

Waterside Air Conditioning replacement - $500,000 Unfavourable Additional funds are required for the final payment for the air conditioning replacement at Waterside.

Merchant Fees - $480,000 Unfavourable The Commonwealth Bank implemented changes to the interchange hierarchy which determines the interchange fees charged by the credit card schemes (Visa/Mastercard). The changes significantly increased the fees payable by Council, and the scope of the increase was not fully recognised in time for the 2018-19 budget.

Property sale proceeds - $217,000 Unfavourable Sale proceeds for the property situated at Robina were less than anticipated.

Hutchinson Street Burleigh works - $200,000 Unfavourable Additional funds are required for the works at Hutchinson Street, Burleigh Heads. Funds are required as a result of a contract variation due to adverse ground conditions (rock) and location of inground services that were not reflected in the available/existing drawings

Qube Car Park purchase - $50,000 Net Unfavourable $313,160 Revenue Increase & $363,160 Expenditure Increase. The purchase of the Qube car park at Broadbeach requires an additional payment of $313,160 for fitout costs which is being offset by a reimbursement from the developer. Further, an additional $50,000 is required to pay the developer for an additional car space, as per the contract. GA14.0828.004. TRANSFER FROM FLEET RESERVE - NIL IMPACT

$1,200,000 Transfer from Fleet Renewal and Purchase Reserve A rise in operational costs, in particular fuel costs, and a reduction in labour recovery revenue resulting from the re-calculation of recoverable hours in the workshops and operational areas has resulted in an increase in expenditure. These costs, totalling $1,200,000, are proposed to be absorbed through a transfer from the Fleet Renewal & Purchase Reserve. ------

MAJOR BUDGET REVIEW VARIATIONS

Depot Operations - $620,000 Favourable Funds are not required this year for facilities maintenance at Tugun, Coomera, Carrara and Miami as future depot plans have not been confirmed. Works are scheduled for the 2019-20 financial year and include repairs to existing buildings, hardstands, access and fencing. Funding for assets audits is also not required as only partial audits will be carried out this financial year. These will be carried out in 2019-20 to supply condition ratings for individual assets which will be used to determine more accurate lifecycle budgets.

Debt Recovery Rates - $335,000 Net Favourable $1,335,000 Expenditure Decrease. Delays have been experienced with commencing the advanced recovery activity for rate debt. These delays result in lower than expected expenditure being incurred this financial year. $1,000,000 Revenue Decrease. The expenditure associated with advanced rate recovery activity is significantly lower than expected due to a delayed start to this process. As the amount of revenue is directly related to the expenditure incurred, the revenue will also be lower than expected.

Property Search fee revenue - $200,000 Favourable Property search fee revenue has increased due to an increasing trend in search requests. Attachment 1 Customer Contact Search fee revenue - $147,000 Favourable Page 140 An increasing trend in search requests assumes there will be an increase in property sales and consequently, an increase in property transfer fee revenue.

Australia Post processing fees - $120,000 Favourable PB_020There has Directors been a lower than Report expected number - March of payments 2019 made to Budget Australia Post Review in relation to Council accounts.

City Transport Improvement Separate Charge - $225,000 Favourable Open Space Maintenance & Enhancement Separate Charge - $75,000 Favourable Recreational Space Separate Charge - $50,000 Favourable Higher than anticipated revenue for the above separate charges due to increased number of rateable properties.

Online Timesheeting project - Nil impact. $722,000 Expenditure Increase & $722,000 Revenue Increase. A project is currently underway to implement an online timesheeting solution (TA21) which will be integrated with our existing payroll software provided by Frontier. This additional module will attract an annual maintenance fee of $54,000 (Refer OS7960O002). Implementation is scheduled to commence in late 2019/ early 2020. It is expected that these costs will be offset by savings across Council as we transition from a paper-based process to an online solution, with the financial benefits commencing in July 2021. Funded from the Investment Fund Reserve, subject to repayment via bankable benefits.

Skilling Queenslanders for Work grant - Nil impact. $260,000 Revenue Increase & $260,000 Expenditure Increase. Skilling Queenslanders for Work is a continuing Queensland Government program that attracts subsidies to the City for employing people from the target group - school leavers and other young people, Aboriginal and Torres Strait people, people with disability, women re-entering the workforce and veterans and ex service personnel. The City can apply for subsidies of up to $26,000 per trainee with a contribution of $4000 from the business to engage a trainee for a six month period. The state provides $15,000 through its First Start initiative alongside the Australian Government subsidy of $11,000 (Work Start $10,000 and PaTH $1000). Respective directorates/branches will contribute $4000 per individual engaged from existing budgets together with other minor costs of engaging the individuals e.g. PPE. To maximise benefits to the City, it is anticipated that twenty (20) traineeship positions can be created for the City to manage multiple cohorts of trainees over the life of the program which, at this stage, ends in 2021. For 2019-20, revenue of $260,000 for government subsidies will be offset by $260,000 expenses associated with trainee wages. Other costs will be borne by the business.

Waterside Air Conditioning replacement - $500,000 Unfavourable Additional funds are required for the final payment for the air conditioning replacement at Waterside.

Merchant Fees - $480,000 Unfavourable The Commonwealth Bank implemented changes to the interchange hierarchy which determines the interchange fees charged by the credit card schemes (Visa/Mastercard). The changes significantly increased the fees payable by Council, and the scope of the increase was not fully recognised in time for the 2018-19 budget.

Property sale proceeds - $217,000 Unfavourable Sale proceeds for the property situated at Robina were less than anticipated.

Hutchinson Street Burleigh works - $200,000 Unfavourable Additional funds are required for the works at Hutchinson Street, Burleigh Heads. Funds are required as a result of a contract variation due to adverse ground conditions (rock) and location of inground services that were not reflected in the available/existing drawings

Future Budget Trends

Director of Organisational Services - Glen Potter DATE

PB_020 Budget Review - Directors Report City of Gold Coast-IN-CONFIDENCE Page : 17 of 23 Report printed as at 02-05-2019 About this Report Attachment 1 Page 141

PB_020 Directors Report - March 2019 Budget Review

PB_020 Budget Review - Directors Report City of Gold Coast-IN-CONFIDENCE Page : 18 of 23 Report printed as at 02-05-2019 About this Report Attachment 1 Page 142

PB_020 Directors Report - March 2019 Budget Review

Directorate: Transport & Infrastructure

Recurrent Non-Recurrent Total Review Review Review (Fav)/Unfav (Fav)/Unfav (Fav)/Unfav Expenses 75,500 (19,098,123) (19,022,623) Revenue (75,500) 21,598,123 21,522,623 Net Directorate Variations 0 2,500,000 2,500,000

Budget Review Categories Directorate Variations Recurrent Non-Recurrent Total Review Review Review (Fav)/Unfav (Fav)/Unfav (Fav)/Unfav General Review - Mar 19 0 2,500,000 2,500,000 Intra Directorate - Mar 19 0 0 0 Net Directorate Variations 0 2,500,000 2,500,000

Inter-Directorate Variations (Balanced between Directorates) Inter Directorate - Mar 19 0 0 0 Total Net Directorate Variations 0 2,500,000 2,500,000

Directorate Variations - Comments on Major Variations The following significant review items have been included in the March Review.

General Reviews

$24,308,479 (Revenue favourable, Expense unfavourable, net nil) - As a result of finalisation of the Stage 2 (construction) contract of the Art Gallery, a revised cash flow has been provided by the managing contractor and therefore excess current year funding has been returned to the Cultural Precinct Reserve. Green Bridge cash flow also updated. No change to completion date to either project.

$2,500,000 (Revenue unfavourable) - A delay in the procurement process for the outsource of the management of TI’s construction waste has resulted in higher than anticipated internal tipping fees. A corresponding revenue increase has been recognised in Water & Waste.

$586,683 ($1,278,988 Revenue favourable, $1,865,670 Expense unfavourable, $586,682 net unfavourable) - Recognition of QRA revenue and associated expenses relating to the Restoration of Essential Public Assets (REPA) program for Ex-TC Debbie.

$318,694 (Expense favourable) - Project savings have been realised in the Reseal and Rehabilitation Program for 2018-19.

$318,694 (Expense unfavourable) - Funding is required for project commencement of Pearson Road early works. A condition of the Federal Government Grant funding is that construction of the project commence prior to 30 June 2019.

$270,250 ($540,500 Revenue favourable, $270,250 Expense unfavourable, $270,250 net favourable) - Recognise increase in revenue and expense representing reinvestment of Park in Centre Scheme (PICS) pilot parking meter revenue for Broadbeach (Division 10) and Burleigh Heads (Division 12). This is in accordance with Key Action 11 of the 2015 City Parking Plan.

$200,000 (Revenue favourable) - Increase in Temporary Road Closure revenue to recognise the continued volume of road closure applications to the end of the Financial Year.

$199,861 (Expense unfavourable) - Additional funding is required for Beach Facility Maintenance in order to cover increased costs from Tropical Cyclone Oma in February 2019.

PB_020 Budget Review - Directors Report City of Gold Coast-IN-CONFIDENCE Page : 19 of 23 Intra Directorate Transfers Report printed as at 02-05-2019 About this Report $200,000 (Expense transfer) - Savings in the Tweed River Bypassing Project (TRESBP) to be offset to complete additional stormwater drainage studies and drainage planning activities to provide for cost effective options to resolve overfloor flooding problems and guide future drainage capital works investment within the City.

$8,000 (Expense transfer) - To provide sponsorship for the 7th Queensland Coastal Conference to be held on the Gold Coast 21-22 August 2019. The City will provide Silver Sponsorship for the event.

An additional AASE Level 6 9DFN Business Engagement Officer is being added to the Gold Coast Light Rail team for the period from 1 May 2019 to 30 June 2022 to focus on business readiness and engagement for Stage 3 and has been funded within the existing budget allocation. The following significant review items have been included in the March Review.

General Reviews

$24,308,479 (Revenue favourable, Expense unfavourable, net nil) - As a result of finalisation of the Stage 2 (construction) contract of the Art Gallery, a revised cash flow has been provided by the managing contractor and therefore excess current year funding has been returned to the Cultural Precinct Reserve. Green Bridge cash flow also updated. No change to completion date to either project.

$2,500,000 (Revenue unfavourable) - A delay in the procurement process for the outsource of the management of TI’s construction waste has resulted in higher than anticipated internal tipping fees. A corresponding revenue increase has been recognised in Water & Waste.

$586,683 ($1,278,988 Revenue favourable, $1,865,670 Expense unfavourable, $586,682 net unfavourable) - Recognition of QRA revenue and associated expenses relating to the Restoration of Essential Public Assets (REPA) program for Ex-TC Debbie.

$318,694 (Expense favourable) - Project savings have been realised in the Reseal and Rehabilitation Program for 2018-19.

$318,694 (Expense unfavourable) - Funding is required for project commencement of Pearson Road early works. A condition of the Federal Government Grant funding is that construction of the project commence prior to 30 June 2019.

$270,250 ($540,500 Revenue favourable, $270,250 Expense unfavourable, $270,250 net favourable) - Recognise increase in revenue and expense representing reinvestment of Park in Centre Scheme (PICS) pilot parking meter revenue for Broadbeach (Division 10) and Burleigh Heads (Division 12). This is in accordance with Key Action 11 of the 2015 City Parking Plan.

$200,000 (Revenue favourable) - Increase in Temporary Road Closure revenue to recognise the continuedAttachment 1 volume of road closure applications to the end of the Financial Year. Page 143

$199,861 (Expense unfavourable) - Additional funding is required for Beach Facility Maintenance in order to cover increased costs from Tropical Cyclone Oma in February 2019. PB_020 Directors Report - March 2019 Budget Review

Intra Directorate Transfers

$200,000 (Expense transfer) - Savings in the Tweed River Bypassing Project (TRESBP) to be offset to complete additional stormwater drainage studies and drainage planning activities to provide for cost effective options to resolve overfloor flooding problems and guide future drainage capital works investment within the City.

$8,000 (Expense transfer) - To provide sponsorship for the 7th Queensland Coastal Conference to be held on the Gold Coast 21-22 August 2019. The City will provide Silver Sponsorship for the event.

An additional AASE Level 6 9DFN Business Engagement Officer is being added to the Gold Coast Light Rail team for the period from 1 May 2019 to 30 June 2022 to focus on business readiness and engagement for Stage 3 and has been funded within the existing budget allocation.

Future Budget Trends

Director of Transport & Infrastructure - Alton Twine DATE

PB_020 Budget Review - Directors Report City of Gold Coast-IN-CONFIDENCE Page : 20 of 23 Report printed as at 02-05-2019 About this Report Attachment 1 Page 144

PB_020 Directors Report - March 2019 Budget Review

Directorate: Water and Waste

Recurrent Non-Recurrent Total Review Review Review (Fav)/Unfav (Fav)/Unfav (Fav)/Unfav Expenses 1,555,000 (7,868,780) (6,313,780) Revenue 0 6,313,780 6,313,780 Net Directorate Variations 1,555,000 (1,555,000) 0

Budget Review Categories Directorate Variations Recurrent Non-Recurrent Total Review Review Review (Fav)/Unfav (Fav)/Unfav (Fav)/Unfav General Review - Mar 19 1,555,000 187,951 1,742,951 Intra Directorate - Mar 19 0 0 0 Operational Projects - Mar 19 0 (1,134,500) (1,134,500) Net Directorate Variations 1,555,000 (946,549) 608,451

Inter-Directorate Variations (Balanced between Directorates) Inter Directorate - Mar 19 0 (608,451) (608,451) Total Net Directorate Variations 1,555,000 (1,555,000) 0

Directorate Variations - Comments on Major Variations Water & Sewerage Services Operating Revenue - Favourable $0.74 million The major contributors to this increase are Interest on Outstanding Rates ($1.0 million) and reduction in Concealed Leakage Remission ($0.4 million). These positive revenue movements have been offset by reductions in Non-drinking Water Sales ($0.24 million) and Scientific Services Revenues ($0.3 million). Details of revenue movements is outlined in the Water and Sewerage Services Budget Review Report submitted to Special Budget Committee.

Water & Sewerage Services Operating Expenses - Favourable $0.09 million The Water and Sewerage Operational Projects program has reduced by $1.2 million, with this decrease being offset by various movements within the business' general operations. The most significant increase is a net increase of $1.8 million for water and sewerage reticulation maintenance costs. These operational expense movements are further detailed in the Water and Sewerage Services Budget Review Report submitted to Special Budget Committee.

Water & Sewerage Capital Program Expenditure - Favourable $2.9 million Movements have been processed within the capital program to reflect changed delivery schedules and mechanisms, with an overall reduction in anticipated spend for the 2018-19 year of $2.9 million. Details of program changes will be addressed within the Budget Review Report separately presented to Special Budget Committee.

Water & Sewerage Capital Program Funding - $4.0 million Unfavourable Expected expenditure on growth-related projects this financial has decreased, with a corresponding reduction in Infrastructure Charges reserves being identified to fund the growth-related portion of the capital program.

Water & Sewerage Community Returns - Favourable $0.6 million As a result of the various budgetary changes recorded throughout the financial year, a minor decrease (less than 1.5%) in income tax equivalents payable to the City has been identified. As a result, total Returns to Community for 2018-19 are now estimated to be $131.0 million, a decrease of 0.44% from the initial adopted budget.

Reserve Transfers (Water and Sewerage Services) - $0.09 Unfavourable Projected capital expenditure and operating expenses have decreased as a result of changes identified within this review. Infrastructure charges reserves able to be utilised to fund the reduced capital program has also declined. As a result, a small increase in the funds available to be transferred to Reserves at year end is projected.

PB_020 BudgetWaste Review Services - Directors Operating Report Profit - Favourable $1.89 million City of Gold Coast-IN-CONFIDENCE Page : 21 of 23 Operating Revenue within the Waste Services business unit is Reportproposed printed to increase as at 02-05-2019 by almost $1.9 million About this Report with the major contributor being an increase in Internal Tipping Revenue (predominantly from the Transport & Infrastructure Directorate). The net movement in Operating Expenses is virtually nil, however some significant expenditure movements have been identified and will be further detailed within the Waste Services Budget Review Report separately presented to Special Budget Committee.

Waste Services Capital Program - Net Impact NIL The Waste Services Capital Program has been reduced by a total of $2.12 million as part of this review. These projects were proposed to be funded via loan drawdowns or reserve funding, with the associated funding amounts also reduced at this budget review.

Water & Sewerage Community Returns - Favourable $0.03 million As a result of the various budgetary changes recorded throughout the financial year, a minor decrease (less than 0.5%) in income tax equivalents payable to the City has been identified. Total Returns to Community for 2018-19 are now estimated to be $18.25 million, a decrease of 0.18% from the initial adopted budget.

Reserve Transfers (Waste Services) - $1.67 million Unfavourable An increase of almost 18% in transfer to the Waste Services Reserve has been identified as part of this review. This increase is predominantly due to the reduction in the capital works program, a significant proportion of which is reserve-funded. Water & Sewerage Services Operating Revenue - Favourable $0.74 million The major contributors to this increase are Interest on Outstanding Rates ($1.0 million) and reduction in Concealed Leakage Remission ($0.4 million). These positive revenue movements have been offset by reductions in Non-drinking Water Sales ($0.24 million) and Scientific Services Revenues ($0.3 million). Details of revenue movements is outlined in the Water and Sewerage Services Budget Review Report submitted to Special Budget Committee.

Water & Sewerage Services Operating Expenses - Favourable $0.09 million The Water and Sewerage Operational Projects program has reduced by $1.2 million, with this decrease being offset by various movements within the business' general operations. The most significant increase is a net increase of $1.8 million for water and sewerage reticulation maintenance costs. These operational expense movements are further detailed in the Water and Sewerage Services Budget Review Report submitted to Special Budget Committee.

Water & Sewerage Capital Program Expenditure - Favourable $2.9 million Movements have been processed within the capital program to reflect changed delivery schedules and mechanisms, with an overall reduction in anticipated spend for the 2018-19 year of $2.9 million. Details of program changes will be addressed within the Budget Review Report separately presented to Special Budget Committee.

Water & Sewerage Capital Program Funding - $4.0 million Unfavourable Expected expenditure on growth-related projects this financial has decreased, with a corresponding reduction in Infrastructure Charges reserves being identified to fund the growth-related portion of the capital program.

Water & Sewerage Community Returns - Favourable $0.6 million As a result of the various budgetary changes recorded throughout the financial year, a minor decrease (less than 1.5%) in income tax equivalents payable to the City has been identified. As a result, total Returns to Community for 2018-19 are now estimated to be $131.0 million, a decrease of 0.44% from the initial adoptedAttachment 1 budget. Page 145

Reserve Transfers (Water and Sewerage Services) - $0.09 Unfavourable Projected capital expenditure and operating expenses have decreased as a result of changes identified within this review. Infrastructure charges reserves able to be utilised to fund the reduced capital program has PB_020also declined. Directors As a result, a smallReport increase - in March the funds available 2019 to beBudget transferred toReview Reserves at year end is projected.

Waste Services Operating Profit - Favourable $1.89 million Operating Revenue within the Waste Services business unit is proposed to increase by almost $1.9 million with the major contributor being an increase in Internal Tipping Revenue (predominantly from the Transport & Infrastructure Directorate). The net movement in Operating Expenses is virtually nil, however some significant expenditure movements have been identified and will be further detailed within the Waste Services Budget Review Report separately presented to Special Budget Committee.

Waste Services Capital Program - Net Impact NIL The Waste Services Capital Program has been reduced by a total of $2.12 million as part of this review. These projects were proposed to be funded via loan drawdowns or reserve funding, with the associated funding amounts also reduced at this budget review.

Water & Sewerage Community Returns - Favourable $0.03 million As a result of the various budgetary changes recorded throughout the financial year, a minor decrease (less than 0.5%) in income tax equivalents payable to the City has been identified. Total Returns to Community for 2018-19 are now estimated to be $18.25 million, a decrease of 0.18% from the initial adopted budget.

Reserve Transfers (Waste Services) - $1.67 million Unfavourable An increase of almost 18% in transfer to the Waste Services Reserve has been identified as part of this review. This increase is predominantly due to the reduction in the capital works program, a significant proportion of which is reserve-funded.

Future Budget Trends

Director of Water and Waste - Paul Heaton DATE

PB_020 Budget Review - Directors Report City of Gold Coast-IN-CONFIDENCE Page : 22 of 23 Report printed as at 02-05-2019 About this Report Attachment 1 Page 146

PB_020 Directors Report - March 2019 Budget Review

Printed: as at 02 May 2019 Review Month: March Directorate: Economic Development and Major Projects;Economy, Planning & Environment;Lifestyle & Community;Office of the CEO;Office of the COO;Organisational Services;Transport & Infrastructure;Water and Waste Cost Centre Category: Internal;Labour;Debt Service;Operating;Capital

PB_020 Budget Review - Directors Report City of Gold Coast-IN-CONFIDENCE Page : 23 of 23 Report printed as at 02-05-2019 About this Report Attachment 1 Page 147

PB_019 Budget Review - Detail for FY 2018 - 2019

Printed: as at 02 May 2019 Review Month: March Directorate: Economic Development and Major Projects;Economy, Planning & Environment;Lifestyle & Community;Office of the CEO;Office of the COO;Organisational Services;Transport & Infrastructure;Water and Waste Cost Centre Category: Internal;Labour;Debt Service;Operating;Capital

Budget Centre Element Type 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 Initial Budget Revised Budget Proposed Budget March Review March Review March Review Recurrent Non-Recurrent Total Movement Movement Movement Economy, Planning & Environment

PE5010O001 - Development Compliance Revenue (1,035,000) (1,035,000) (1,035,000) 0 0 0 Expense 4,559,885 4,559,885 4,459,885 0 (100,000) (100,000) Net 3,524,885 3,524,885 3,424,885 0 (100,000) (100,000) Justification: Expense - favourable $100,000 These funds are being transferred to PE5220 (Major Assessment) to assist to defray costs associated with obtaining legal advice in associated with significant development applications.

PE5050O001 - EP&E - Legals Revenue 0 0 (300,000) 0 (300,000) (300,000) Expense 5,023,753 5,023,753 5,023,753 0 0 0 Net 5,023,753 5,023,753 4,723,753 0 (300,000) (300,000) Justification: Revenue - favourable $300,000: A budget allocation is being included to recognise the value of legal fees being recovered from applicants in relation to the drafting of infrastructure agreements etc.

PB_019 Budget Review - Detail City of Gold Coast-IN-CONFIDENCE Page : 1 of 190 About this Report Attachment 1 Page 148

PB_019 Budget Review - Detail for FY 2018 - 2019

Budget Centre Element Type 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 Initial Budget Revised Budget Proposed Budget March Review March Review March Review Recurrent Non-Recurrent Total Movement Movement Movement Economy, Planning & Environment

PE5100O005 - Business Support Administration Revenue 0 0 (30,000) 0 (30,000) (30,000) Expense 4,190,715 4,147,155 4,131,655 0 (15,500) (15,500) Net 4,190,715 4,147,155 4,101,655 0 (45,500) (45,500) Justification: Revenue - favourable $30,000: The City was successful in securing funding from the Department of Housing, Local Government & Planning to assist defray the costs of implementing reforms required as a result of the implementation of the new Planning Act.

Expense - favourable $15,500: This funding is being transferred to Corporate Planning & Performance to fund the development of a City-wide project management methodology.

PE5120C002 - Koala Habitat Acquisition & Enhancement Revenue (10,850,000) (10,850,000) (10,150,000) 0 700,000 700,000 Expense 10,850,000 10,850,000 10,150,000 0 (700,000) (700,000) Net 0 0 0 0 0 0 Justification: Expense - favourable $700,000; Revenue - unfavourable $700,000: Council recently resolved (G19.0226.011) to progress the proposed acquisition of land for Koala Habitat purposes. The level of funding required for work that will be undertaken during the current financial year is approximately $100,000. The remainder of levy funding raised in 2018-19 is being returned to the Koala Habitat Acquisition and Enhancement Reserve at this review for allocation in future years.

PB_019 Budget Review - Detail City of Gold Coast-IN-CONFIDENCE Page : 2 of 190 About this Report Attachment 1 Page 149

PB_019 Budget Review - Detail for FY 2018 - 2019

Budget Centre Element Type 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 Initial Budget Revised Budget Proposed Budget March Review March Review March Review Recurrent Non-Recurrent Total Movement Movement Movement Economy, Planning & Environment

PE5120O001 - Environmental Planning Revenue (2,285,632) (2,285,632) (2,285,632) 0 0 0 Expense 2,819,632 3,176,109 3,152,334 0 (23,775) (23,775) Net 534,000 890,477 866,702 0 (23,775) (23,775) Justification: Expense - favourable $23,775: Minor consultancy allocations associated with the "Into Nature" and "NCAP Incentives" projects have been identified as no longer required in the current financial year. This funding is being returned to the OSMESC Reserve for reallocation in future years.

PE5120O002 - Environmental Offsets Revenue 0 (490,000) (666,090) 0 (176,090) (176,090) Expense 0 1,184,360 1,360,450 0 176,090 176,090 Net 0 694,360 694,360 0 0 0 Justification: Expense - favourable $176,090; Revenue - unfavourable $176,090: A revenue and expense budget is being recognised to account for Koala Habitat ecological offset funding that will be received from the Water and Waste directorate, in association with the Pimpama to Coombabah Recycled Water Release Augmentation (Stage 2) project.

PB_019 Budget Review - Detail City of Gold Coast-IN-CONFIDENCE Page : 3 of 190 About this Report Attachment 1 Page 150

PB_019 Budget Review - Detail for FY 2018 - 2019

Budget Centre Element Type 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 Initial Budget Revised Budget Proposed Budget March Review March Review March Review Recurrent Non-Recurrent Total Movement Movement Movement Economy, Planning & Environment

PE5120O003 - Flooding & Drainage Revenue (85,000) (119,716) (119,716) 0 0 0 Expense 2,123,000 2,157,716 2,117,716 0 (40,000) (40,000) Net 2,038,000 2,038,000 1,998,000 0 (40,000) (40,000) Justification: Expense - favourable $40,000: This funding is being transferred to PE5120O004 (Bushfire, Landslips & Coastal Hazards) to fund the City-wide mapping of rock fall risk areas within our Parks.

PE5120O004 - Bushfire, Landslip, Coastal Hazards Revenue 0 0 0 0 0 0 Expense 100,750 100,750 140,750 0 40,000 40,000 Net 100,750 100,750 140,750 0 40,000 40,000 Justification: Expense - unfavourable $40,000: This funding is being transferred from PE5120O003 (Flooding & Drainage) to fund the City-wide mapping of rock fall risk areas within our Parks.

PB_019 Budget Review - Detail City of Gold Coast-IN-CONFIDENCE Page : 4 of 190 About this Report Attachment 1 Page 151

PB_019 Budget Review - Detail for FY 2018 - 2019

Budget Centre Element Type 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 Initial Budget Revised Budget Proposed Budget March Review March Review March Review Recurrent Non-Recurrent Total Movement Movement Movement Economy, Planning & Environment

PE5140O001 - Strategic Infrastructure Revenue 0 0 (100,000) 0 (100,000) (100,000) Expense 2,211,270 2,211,270 2,311,270 0 100,000 100,000 Net 2,211,270 2,211,270 2,211,270 0 0 0 Justification: Revenue - favourable $100,000; Expense - unfavourable $100,000: The City was successful in securing State Government grant funding to assist defray the costs of developing a Growth Projections Framework and Methodology. Total funding approved is $150,000 with $100,000 expected to be received during 2018-19, with the remainder to be received in 2019-20.

PE5150O018 - Transfers To & From Reserves Revenue 0 (77,600) (77,600) 0 0 0 Expense 0 57,271 81,046 0 23,775 23,775 Net 0 (20,329) 3,446 0 23,775 23,775 Justification: Expense - unfavourable $23,775: As noted at PE5120O001 (Environmental Planning) above, minor consultancy budgets no longer required in the current financial year are being transferred to the OSMESC reserve as part of this review for reallocation in future years.

PB_019 Budget Review - Detail City of Gold Coast-IN-CONFIDENCE Page : 5 of 190 About this Report Attachment 1 Page 152

PB_019 Budget Review - Detail for FY 2018 - 2019

Budget Centre Element Type 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 Initial Budget Revised Budget Proposed Budget March Review March Review March Review Recurrent Non-Recurrent Total Movement Movement Movement Economy, Planning & Environment

PE5160C001 - Centre Improvement Program - Capital Revenue (400,000) (1,199,999) (1,199,999) 0 0 0 Expense 6,840,285 4,954,962 4,769,192 0 (185,770) (185,770) Net 6,440,285 3,754,963 3,569,193 0 (185,770) (185,770) Justification: Expense - favourable $185,770: Centre Improvement Program capital budget allocations not required in the current financial year are being returned to the CIP Reserve for allocation to future CIP / CPM projects.

PE5160O005 - CIP Reserve Transfers Revenue 0 0 0 0 0 0 Expense 0 0 185,770 0 185,770 185,770 Net 0 0 185,770 0 185,770 185,770 Justification: Expense - unfavourable $185,770: Centre Improvement Program capital budget allocations not required in the current financial year are being returned to the CIP Reserve for allocation to future CIP / CPM projects.

PB_019 Budget Review - Detail City of Gold Coast-IN-CONFIDENCE Page : 6 of 190 About this Report Attachment 1 Page 153

PB_019 Budget Review - Detail for FY 2018 - 2019

Budget Centre Element Type 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 Initial Budget Revised Budget Proposed Budget March Review March Review March Review Recurrent Non-Recurrent Total Movement Movement Movement Economy, Planning & Environment

PE5200O001 - Planning Assessment MCU & ROL Revenue (10,140,000) (10,140,000) (10,140,000) 0 0 0 Expense 5,349,840 4,523,470 4,703,470 0 180,000 180,000 Net (4,790,160) (5,616,530) (5,436,530) 0 180,000 180,000 Justification: Expense - unfavourable $180,000: These funds are being transferred from PE5230 (Contributed Assets) to defray additional development assessment resourcing costs being incurred within this budget centre.

PE5220O001 - Major Assessment Revenue 0 0 0 0 0 0 Expense 741,045 1,567,415 1,667,415 0 100,000 100,000 Net 741,045 1,567,415 1,667,415 0 100,000 100,000 Justification: Expense - unfavourable $100,000 These funds are being transferred from PE5010 (Development Compliance) to assist to defray costs associated with obtaining legal advice in associated with significant development applications.

PB_019 Budget Review - Detail City of Gold Coast-IN-CONFIDENCE Page : 7 of 190 About this Report Attachment 1 Page 154

PB_019 Budget Review - Detail for FY 2018 - 2019

Budget Centre Element Type 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 Initial Budget Revised Budget Proposed Budget March Review March Review March Review Recurrent Non-Recurrent Total Movement Movement Movement Economy, Planning & Environment

PE5230O001 - Contributed Assets Revenue (3,985,000) (3,985,000) (3,985,000) 0 0 0 Expense 5,616,370 5,616,370 5,436,370 0 (180,000) (180,000) Net 1,631,370 1,631,370 1,451,370 0 (180,000) (180,000) Justification: Expense - favourable $180,000: These funds are being transferred to PE5200 (Development Assessment MCU & ROL) to defray additional development assessment resourcing costs being incurred within that budget centre.

PE5370O001 - Economic Development Revenue (183,639) (183,639) (183,639) 0 0 0 Expense 6,079,918 7,355,906 7,313,406 0 (42,500) (42,500) Net 5,896,279 7,172,267 7,129,767 0 (42,500) (42,500) Justification: Expense - favourable $42,500: This budgetary movement comprises: (a) ITIP Program - savings of $100,000 are available from the ITIP Program due to the decision to no longer offer a GC Business Week VIP Program; (b) Sports Accord - funding of $57,500 has been transferred from the CWG Legacy Program for the Sports Accord project currently in delivery.

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PB_019 Budget Review - Detail for FY 2018 - 2019

Budget Centre Element Type 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 Initial Budget Revised Budget Proposed Budget March Review March Review March Review Recurrent Non-Recurrent Total Movement Movement Movement Economy, Planning & Environment

PE5380C001 - Digital City - CAPITAL Revenue 0 (9,000,000) (9,000,000) 0 0 0 Expense 800,000 9,827,348 9,330,020 0 (497,328) (497,328) Net 800,000 827,348 330,020 0 (497,328) (497,328) Justification: Expense - favourable $497,328: A review and reallocation of Digital City project funding has been undertaken, with a net transfer of this value to Digital City operational projects, in accordance with appropriate accounting classification of projected expenditure.

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PB_019 Budget Review - Detail for FY 2018 - 2019

Budget Centre Element Type 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 Initial Budget Revised Budget Proposed Budget March Review March Review March Review Recurrent Non-Recurrent Total Movement Movement Movement Economy, Planning & Environment

PE5380O001 - Digital City Operational Revenue (1,850,000) (2,850,000) (1,231,000) 0 1,619,000 1,619,000 Expense 2,576,010 3,849,803 4,347,131 0 497,328 497,328 Net 726,010 999,803 3,116,131 0 2,116,328 2,116,328 Justification: Expense - unfavourable $497,328 / Revenue - unfavourable $1,619,000: Expense: A review and reallocation of Digital City project funding has been undertaken, with a net transfer of this value from Digital City capital projects, in accordance with appropriate accounting classification of projected expenditure.

Revenue: The initial adopted budget included an estimate of $1,850,000 in revenue to be received in relation to Digital City offerings, which had been based on potential uptake at that point in time. Subsequently, the key potential customer sought a significant “volume discount” which was not acceptable to the City and, if accepted, would have been materially detrimental to the future value of the network.

At this review a total reduction in this revenue item of $1,479,500 is being recorded, with revenue expected to be received in 2018-19 now estimated at $370,500, with an expected ‘harvest’ of a further $641,000 from the 2018-19 capital allocation for Microwave Refresh.

An independent review of the business case for extension of the optic fibre network was approved by Council (Resolution # G18.1207.014) and is nearing completion. Preliminary findings indicate that the previously forecast funds for harvesting, as approved by Council, are realisable and will be sufficient to underpin future debt servicing requirements for the City’s investment.

Delays have been experienced with the project, particularly due to issues around 5G, including the Federal Government’s ruling to ban Huawei equipment from 5G (impacting all carriers in Australia) and structural changes in the industry. Market interest in the City’s program remains strong and there is a high level of confidence that deal will proceed in late 2019 as 5G implications are resolved.

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PB_019 Budget Review - Detail for FY 2018 - 2019

Budget Centre Element Type 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 Initial Budget Revised Budget Proposed Budget March Review March Review March Review Recurrent Non-Recurrent Total Movement Movement Movement Economy, Planning & Environment

PE5380O002 - Master Facil. Access Deed Ops Revenue 0 0 (139,500) 0 (139,500) (139,500) Expense 0 0 0 0 0 0 Net 0 0 (139,500) 0 (139,500) (139,500) Justification: Revenue - favourable $139,500: Adjustment to Digital City projected revenues, identifying a total of $139,500 in expected receipts of revenue for Master Facilities Access Deeds.

PE5380O003 - Transfer To & From Reserve Revenue 0 0 0 0 0 0 Expense 0 1,850,000 1,011,500 0 (838,500) (838,500) Net 0 1,850,000 1,011,500 0 (838,500) (838,500) Justification: Expense - favourable $838,500: Following a review of expected revenues from Digital City operations, expected revenue / avoided costs to be recognised within 2018-20 total $1,011,500 ($370,500 revenue plus $641,000 Microwave Refresh capital costs). As a result, a reduction in the value to be transferred to the Investment Reserve has been recognised.

Total for Directorate: Economy, Planning & Environment

Revenue (42,074,271) (53,476,586) (51,903,176) 0 1,573,410 1,573,410 Expense 122,045,600 137,370,831 136,050,421 0 (1,320,410) (1,320,410) Net 79,971,329 83,894,245 84,147,245 0 253,000 253,000

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PB_019 Budget Review - Detail for FY 2018 - 2019

Budget Centre Element Type 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 Initial Budget Revised Budget Proposed Budget March Review March Review March Review Recurrent Non-Recurrent Total Movement Movement Movement Lifestyle & Community

CS4000C005 - Strategy Risk & Performance Capital Revenue 0 0 0 0 0 0 Expense 0 0 32,000 0 32,000 32,000 Net 0 0 32,000 0 32,000 32,000 Justification: $32,000 Expenditure Increase

Office Redesign project resulting from the Lifestyle and Community Review in 2017-18. Accommodation did not meet standards and required a wall to be moved. A confidential People & Culture office space was also created next to the Director's office.

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PB_019 Budget Review - Detail for FY 2018 - 2019

Budget Centre Element Type 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 Initial Budget Revised Budget Proposed Budget March Review March Review March Review Recurrent Non-Recurrent Total Movement Movement Movement Lifestyle & Community

CS4000O017 - Strategy Risk & Perf - Project & Assets Revenue 0 0 0 0 0 0 Expense 769,880 829,880 936,980 0 107,100 107,100 Net 769,880 829,880 936,980 0 107,100 107,100 Justification: $107,100 Expenditure Increase

An amount of $122,600 is required to fund the temporary employment of a Special Projects Officer. This officer is conducting two pieces of work this financial year : - Developing asset and gateway project governance framework for infrastructure/capital works projects. This officer will be contributing requirements, developing directorate procedures for the Lifestyle and Community Directorate. ($61,600) - Managing delivery of the Library strategic framework review ($61,000) These works are both expected to be completed by June 2019.

An allocation of $15,500 has been transferred via inter-directorate transfer to the Office of the COO, Budget Centre (CG6100O001) Corporate Planning Performance as a contribution to the P3M Enterprise methodology to collaborate on a project to develop a documented project management methodology for non-infrastructure projects which will be supported via the Enterprise Lifecycle (in Project On-line System). This will support Directorates to transition to Project On-line through 2019-20. It is proposed that this work will be progressed during early 2019, for completion prior to 30 June 20.

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PB_019 Budget Review - Detail for FY 2018 - 2019

Budget Centre Element Type 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 Initial Budget Revised Budget Proposed Budget March Review March Review March Review Recurrent Non-Recurrent Total Movement Movement Movement Lifestyle & Community

CS4040C001 - Safety Camera Network Capital Revenue 0 (647,157) (674,761) 0 (27,604) (27,604) Expense 500,000 1,138,892 1,166,496 0 27,604 27,604 Net 500,000 491,735 491,735 0 0 0 Justification: ($27,604) Revenue Increase $27,604 Expenditure Increase

Safe Urban Village State Government Subsidy $27,604: Project 31668 Budget review required to recognise State Government final subsidy payment for Safe Urban Villages Project.

Reallocation of $29,200 in capital funding for a utility vehicle (Project 32110) from capex project Safety Camera Network Southport (Project 30442). This transfer has a net nil impact on this budget centre. A Technical Officer for the Safety Camera Network was approved by Council in the September 2018 Budget Review and created in December 2018. The position is required to undertake on-site technical works including installing, interchanging and repairing CCTV cameras and contributing to troubleshooting and maintenance of the network, with the majority of the time spent on site visiting numerous locations across the city. The provision of a vehicle will ensure maintenance works are completed and short term response obligations are met.

CS4050C002 - Safe & Liveable Communities - Capital Revenue 0 0 0 0 0 0 Expense 175,000 90,250 125,250 0 35,000 35,000 Net 175,000 90,250 125,250 0 35,000 35,000 Justification: $35,000 Expenditure Increase

Budget review required to transfer operational funds from budget centre CS4050O004 Beach Access program (Project 31498) to a capital project to enable delivery of beach wheelchair accessible showers at 7 locations across the city to complement the Beach Access program.

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PB_019 Budget Review - Detail for FY 2018 - 2019

Budget Centre Element Type 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 Initial Budget Revised Budget Proposed Budget March Review March Review March Review Recurrent Non-Recurrent Total Movement Movement Movement Lifestyle & Community

CS4050O004 - Safe and Liveable Communities Operations Revenue (112,803) (150,253) (150,253) 0 0 0 Expense 2,351,424 3,135,976 3,100,976 0 (35,000) (35,000) Net 2,238,621 2,985,723 2,950,723 0 (35,000) (35,000) Justification: ($35,000) Expenditure Decrease

Budget review required to transfer operational funds from Beach Access program (Project 31498) to a capital project in budget centre CS4050C002 to enable delivery of beach wheelchair accessible showers at 7 locations across the city to complement the Beach Access program.

CS4100C001 - Computer Hardware/Software > $10000 Revenue 0 0 0 0 0 0 Expense 180,498 429,145 679,145 0 250,000 250,000 Net 180,498 429,145 679,145 0 250,000 250,000 Justification: $250,000 Expenditure Increase

The State Library of Queensland approved the request to use $250,000 of the Library Resources Grant funding to implement the Digital Wi-Fi priority project. Funds re-allocated during the March 2019 Budget Review from Library Resources CS4100O014 to Project 32108. This project gives City Libraries access to high speed Wi-Fi for customers and enhances and improves visitor experience. City Libraries to be connected to a new 10GBPS network which operates 10 times faster than the current network.

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PB_019 Budget Review - Detail for FY 2018 - 2019

Budget Centre Element Type 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 Initial Budget Revised Budget Proposed Budget March Review March Review March Review Recurrent Non-Recurrent Total Movement Movement Movement Lifestyle & Community

CS4100C003 - Library Services - Capital Revenue 0 (300,000) (88,932) 0 211,068 211,068 Expense 728,060 1,797,610 1,579,482 0 (218,128) (218,128) Net 728,060 1,497,610 1,490,550 0 (7,060) (7,060) Justification: ($211,068) Revenue Decrease $211,068 Expenditure Decrease Ormeau Library Land Acquisition LGIP : Project 31627 Reprovided budget approved to finalise site works for the Ormeau Library land acquisition are complete for this financial year. The remaining infrastructure charges budget can now be transferred back into the Infrastructure Charges Reserve.

($7,060) Expenditure Decrease Renewal program has been completed at the Southport Library for this financial year, with surplus funds able to be returned.

CS4100O002 - City Libraries - Recruitment Revenue 0 0 0 0 0 0 Expense 16,200 16,200 11,200 0 (5,000) (5,000) Net 16,200 16,200 11,200 0 (5,000) (5,000) Justification: ($5,000) Expenditure Decrease

Reduction in City Libraries recruitment budget with funds not required for the remainder of the financial year.

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PB_019 Budget Review - Detail for FY 2018 - 2019

Budget Centre Element Type 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 Initial Budget Revised Budget Proposed Budget March Review March Review March Review Recurrent Non-Recurrent Total Movement Movement Movement Lifestyle & Community

CS4100O005 - Elanora Library Revenue 0 0 0 0 0 0 Expense 2,538,146 2,517,350 2,497,350 0 (20,000) (20,000) Net 2,538,146 2,517,350 2,497,350 0 (20,000) (20,000) Justification: ($20,000) Expenditure Decrease

Latest forecasts of expenditure for the financial year have identified savings in the maintenance and cleaning budgets.

CS4100O006 - Helensvale Library Revenue (5,100) (5,100) (5,100) 0 0 0 Expense 1,797,939 1,877,939 1,834,239 0 (43,700) (43,700) Net 1,792,839 1,872,839 1,829,139 0 (43,700) (43,700) Justification: ($43,700) Expenditure Decrease

A budget reduction of $43,700 is able to be realised as a result of software licensing issues which have resulted in an inability to delivery the program this financial year.

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PB_019 Budget Review - Detail for FY 2018 - 2019

Budget Centre Element Type 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 Initial Budget Revised Budget Proposed Budget March Review March Review March Review Recurrent Non-Recurrent Total Movement Movement Movement Lifestyle & Community

CS4100O007 - Library - Administration Revenue (176,952) (176,952) (176,952) 0 0 0 Expense 3,722,728 3,722,728 3,831,228 160,000 (51,500) 108,500 Net 3,545,776 3,545,776 3,654,276 160,000 (51,500) 108,500 Justification: $160,000 Expenditure Increase Computer Operations Libraries. Required due to the renegotiations for a new Maintenance Agreement for library equipment, such as security gates, self serve machines, auto returns and after hours chutes. The increase is due to the rollover of various equipment from warranty into maintenance. The current agreement will terminate and the new agreement is to include the additional equipment once they conclude their warranty period. This amount will be included as recurrent in the 2019-20 budget.

($51,500) Expenditure Decrease Budget for Council Officer's Exhibition not required due to exhibition not held this year ($1,500) Budget for Special Library Equipment-Customers not required for the remainder of this financial year, due to specific furniture and equipment not being available to complete procurement ($50,000).

CS4100O011 - Robina Library Revenue 0 0 0 0 0 0 Expense 1,599,394 1,690,194 1,686,194 0 (4,000) (4,000) Net 1,599,394 1,690,194 1,686,194 0 (4,000) (4,000) Justification: ($4,000) Expenditure Decrease

Mudgeeraba Library has closed and no further associated costs are to be incurred, resulting in a budget saving of $4,000.

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PB_019 Budget Review - Detail for FY 2018 - 2019

Budget Centre Element Type 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 Initial Budget Revised Budget Proposed Budget March Review March Review March Review Recurrent Non-Recurrent Total Movement Movement Movement Lifestyle & Community

CS4100O014 - Collection Services Libraries Revenue (2,098,239) (2,098,239) (2,098,239) 0 0 0 Expense 6,605,779 6,514,979 6,264,979 0 (250,000) (250,000) Net 4,507,540 4,416,740 4,166,740 0 (250,000) (250,000) Justification: ($250,000) Expenditure Decrease

The State Library of Queensland approved the request to use $250,000 of the Library Resources Grant funding to implement the Digital Wi-Fi priority project. Funds transferred to Project 32108 CS4100C001.

CS4100O026 - Upper Coomera Library Revenue 0 0 0 0 0 0 Expense 1,158,303 1,158,303 1,138,303 0 (20,000) (20,000) Net 1,158,303 1,158,303 1,138,303 0 (20,000) (20,000) Justification: ($20,000) Expenditure Decrease

Lower than expected property and building maintenance costs this financial year has realised a saving of $20,000.

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PB_019 Budget Review - Detail for FY 2018 - 2019

Budget Centre Element Type 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 Initial Budget Revised Budget Proposed Budget March Review March Review March Review Recurrent Non-Recurrent Total Movement Movement Movement Lifestyle & Community

CS4100O027 - Library Services Grant Revenue 0 (37,244) (237,981) 0 (200,737) (200,737) Expense 0 725,997 926,734 0 200,737 200,737 Net 0 688,753 688,753 0 0 0 Justification: ($200,737) Revenue Increase $200,737 Expenditure Increase

Recognition of Grants as follows. First Five Forever : Project 30979, $176,137 State Library of Queensland. Grant funding received for ongoing First Five Forever program, implementing early years literacy program for 0-5 year olds.

Tech Savvy Seniors : Project 31046 $15,000 State Library of Queensland. Grant funding for Tech Savvy Seniors program, implementing digital technology training to encourage more seniors to embrace technology and improve their digital skills.

Girls who Steam : Project 31695 $4,600. Grant from the Department of Environment and Science - Advance Queensland Engaging Science Grant - for funding the project Girls who STEAM.

Seed of Change - Stand against Domestic Violence: Project 32100 recently awarded to Council $5,000.

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PB_019 Budget Review - Detail for FY 2018 - 2019

Budget Centre Element Type 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 Initial Budget Revised Budget Proposed Budget March Review March Review March Review Recurrent Non-Recurrent Total Movement Movement Movement Lifestyle & Community

CS4130O001 - Library - Administration Revenue 0 0 0 0 0 0 Expense 698,467 698,467 683,467 0 (15,000) (15,000) Net 698,467 698,467 683,467 0 (15,000) (15,000) Justification: ($15,000) Expenditure Decrease

Savings identified from the casual labour budget at Elanora due to staff training during the year.

CS4130O002 - City Libraries - Ext Training Ohead -Cas Revenue 0 0 0 0 0 0 Expense 15,050 15,050 30,050 0 15,000 15,000 Net 15,050 15,050 30,050 0 15,000 15,000 Justification: $15,000 Expenditure Increase

Additional budget is required for mandatory WHS training for all library staff, (Manual Handling) and also City Libraries strategic planning workshops enabling library staff to contribute to the future direction of City Libraries services.

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PB_019 Budget Review - Detail for FY 2018 - 2019

Budget Centre Element Type 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 Initial Budget Revised Budget Proposed Budget March Review March Review March Review Recurrent Non-Recurrent Total Movement Movement Movement Lifestyle & Community

CS4150C002 - Developers Contributions Parks & Rec Revenue 0 (269,855) (299,855) 0 (30,000) (30,000) Expense 0 263,497 293,497 0 30,000 30,000 Net 0 (6,358) (6,358) 0 0 0 Justification: ($30,000) Revenue Increase $30,000 Expenditure Increase

Div 4 - Nick Palvis Park Fitness Equipment : Project 32072 The movement represents an allocation from a Park Developers Contribution for fitness equipment as resolved LC19.0122.003.

CS4150C003 - Public Conveniences Construction Revenue (230,000) (254,353) (254,353) 0 0 0 Expense 230,000 782,511 857,511 0 75,000 75,000 Net 0 528,158 603,158 0 75,000 75,000 Justification: $75,000 Expenditure Increase

$35,000 Expenditure Increase Ed Hardy Park Toilet Renewal : Project 31999 Increased costs for the detailed design of Ed Hardy Park toilet renewal. This project was brought forward as funding was provided from Safe and Liveable Communities to incorporate a Disability Discrimination Act (DDA) compliant change room to coincide with the Beach Wheelchair program being offered by the nearby Surf Club. This change room will allow users with a wheelchair to get changed at the beach, significantly improving access for persons with a disability to enjoy a beach experience. This toilet renewal will also require additional funding as existing sewer connection will also need to be upgraded.

$40,000 Expenditure Increase Burleigh Heads Public Convenience Extension LGIP : Project 31417 Additional funding required to cover the extensive service connection costs for a new maintenance shed in Rudd Park (as a result of the toilet upgrade). Sewer, power and water connection require the demolition and re-construction of a section of the Gold Coast Water pump station in order to complete the project.

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PB_019 Budget Review - Detail for FY 2018 - 2019

Budget Centre Element Type 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 Initial Budget Revised Budget Proposed Budget March Review March Review March Review Recurrent Non-Recurrent Total Movement Movement Movement Lifestyle & Community

CS4150C005 - Major Open Space Development Revenue (11,807,300) (12,590,707) (12,590,707) 0 0 0 Expense 12,163,800 14,144,146 14,614,146 0 470,000 470,000 Net 356,500 1,553,439 2,023,439 0 470,000 470,000 Justification:

$470,000 Expenditure Increase

$350,000 Expenditure Increase, budget transfer for post Commonwealth Games Legacy projects funded from Office of the CEO budget centre CE8260O001 City Projects - OCEO for the following projects. $70,000 Village Heart Pedestrian Link : Project 32089 $100,000 Village Heart Events Access Road : Project 32090 $30,000 Keith Hunt Park Hockey Entry Sign : Project 32091 $80,000 Coomera AFL & Touch field fencing : Project 32104 $70,000 Coomera Rugby Union field re-profile : Project 32105

$65,000 Expenditure Increase, Ronnie Long Park Disabled Access : Project 32005 Design to provide disability access to Ronnie Long Park. Retaining Walls and Disability Discrimination Act (DDA) pathway will be constructed to provide all inclusive access to the park and facilities and oceanway. Additional funding is being requested to ensure that this path can be undertaken.

$15,000 Expenditure Increase, Keith Hunt Park Car spaces : Project 32094 This budget is required to provide disabled car parking spaces at a popular sports park. Funding will provide two DDA compliant car parks at Keith Hunt car park to service two buildings and provide better disabled parking options to the community.

$34,000 Expenditure Increase, GCR Botanic Garden Link Path : Project 31767 This budget is required for the additional expense to the Project in order to make the path DDA compliant.

CS4150C010 - Asset Replacement Renewal & Renovation

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PB_019 Budget Review - Detail for FY 2018 - 2019

Budget Centre Element Type 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 Initial Budget Revised Budget Proposed Budget March Review March Review March Review Recurrent Non-Recurrent Total Movement Movement Movement Lifestyle & Community Revenue 0 (131,648) (231,648) 0 (100,000) (100,000) Expense 5,883,600 7,845,442 8,076,588 0 231,146 231,146 Net 5,883,600 7,713,794 7,844,940 0 131,146 131,146 Justification: ($100,000) Revenue Increase $231,146 Expenditure Increase

($100,000) Revenue Increase, $100,000 Expenditure Increase Jacobs Well Skatepark Renewal : Project 31878. RESOLUTION G18.1207.007 allocated LAW funds from Division 1 to support the renewal and improvements to the skate park at Jacobs Well.

$36,146 Expenditure Increase Bochow Park Shelter and Picnic Renewal : Project 32087. Replace existing infrastructure from large tree damage. These works are required to replace a shelter and picnic settings that were damaged from a large tree falling on the infrastructure during a significant storm on 21 December 2018 .

$60,000 Expenditure Increase Beree-Badalla Cyclone Oma damage repair : Project 32097 Extensive damage to the Beree-Badalla boardwalk in Palm beach has been sustained during the Cyclone Oma event which has resulted in lifting of sections of the boardwalk which have resulted in many unstable sections of the structure. This funding allocation is required to make good these sections to allow safe passage for users.

$92,000 Expenditure Increase Markeri Street Retaining Wall 2018-19 : Project 31929 The extent of works at this location has increased due to more significant vegetation clearing, footpath and curb and channel rectification and landscape treatments as a consequence of activities relating to the removal of an asbestos fence adjacent to houses.

$87,600 Expenditure Increase Budget transfer from Parks operating budget centre CS4150O032 Parks and Landscape cost centre Maintenance Operating Projects (1007251) to capital project Queen Elizabeth Park Irrigation 18-20 (Project 32079). The heavily used activation areas of the Coolangatta Foreshore parks have required irrigation to support their post event/ activation recovery. The project budget needs to be moved from Operating to Capital to meet our Asset Accounting obligations given the project has created a capital asset rather than just carried out a maintenance task.

$35,000PB_019 BudgetExpenditure Review Increase - Detail City of Gold Coast-IN-CONFIDENCE Page : 24 of 190 Budget transfer from operating budget centre CS4350O001 Heritage Buildings Maintenance cost centre Heritage Maintenance Projects (1007338) to capital project Schmidt Family Farm About this Report Re Stump (Project 32093). Project moved from Operating to Capital after review by Asset Accounting deeming that the maintenance carried out was Capital in nature.

($100,000) Expenditure Decrease Currumbin Hills Park amenity contribution : Project 31873 Funds were allocated as a contribution to a club project to construct new amenities however it was subject to the club gaining a grant. As the grant application was unsuccessful, project has been deferred pending suitable funding being sourced.

($90,000) Expenditure Decrease Pat Fagan Park Path Structure & Platform Renewal : Project 31803 Pat Fagan path structure renewal works have been cancelled as more extensive maintenance works performed in January have lifted the condition of the structure to a level 2-3 thus extending the life of the structure.

$183,000 Expenditure Decrease and Increase, Gold Coast Regional Botanic Garden -Ros Prepared Surfaces Pathway Renewal : Project 31840 to numerous other pathway and platform renewal projects.The market response for construction of this path required an engineered, rather than on-ground pathway which then triggered Disability Discrimination Act (DDA) compliance, resulting in significant cost increases unable to be funded within current budget. As result, a number of other pathway replacement projects are able to be funded and completed by the end of the financial year that were planned to be delivered in the 2019-20 financial year. The Projects brought forward include : $15,309 BOTANIC GARDEN-ROS Path & Plat renewal : Project 31800 $20,926 COVA PARK Path Structure & Platform Renewal : Project 31801 $9,765 WYBERBA Street Public Conveniences renewal : Project 31276 $40,000 Mangrove to Mountain Path Replacement : Project 32068 $17,000 Friends Centre Footpath Repair : Project 32069 $40,000 Feature Lake Timber Boardwalk Repair : Project 32070 $34,000 Botanic Garden Link Path : Project 31767 $6,000 Botanic Garden CCTV : Project 31766

Lions Park (Jacob Wells) Park Upgrade : Project 32067. Total Budget $94,000 These works are required as area requires constant maintenance to keep grass alive due to high traffic, lots of use and exposure to tough coastal environment. Project includes artificial turf and additional hard standing to prevent ongoing maintenance expenditure and to improve safety for visitors. The Project will be funded from Emergent Park Asset Works 2018-19 ($57,500) and ($36,500) under spends from 6 completed projects.

$15,000 Expenditure Budget created for Schuster's Park Playground : Project 32095. Contribution to LAW Project 26504 Schuster's Park Playground. This Project is a LAW funded project which relates to the replacement of an existing playground and construction of a new significantly improved playground. This budget is to cover the demolishment of the existing playground so that LAW funding is allocated to new play items. Funded from under spend on completed projects ($6,600) Post Office Park Buildings & Shed renewal : Project 31835 ($4,400) Coombabah Potting Shed : Project 31696 ($4,000) Hardy's House Termites : Project 31990 ($100,000) Revenue Increase $231,146 Expenditure Increase

($100,000) Revenue Increase, $100,000 Expenditure Increase Jacobs Well Skatepark Renewal : Project 31878. RESOLUTION G18.1207.007 allocated LAW funds from Division 1 to support the renewal and improvements to the skate park at Jacobs Well.

$36,146 Expenditure Increase Bochow Park Shelter and Picnic Renewal : Project 32087. Replace existing infrastructure from large tree damage. These works are required to replace a shelter and picnic settings that were damaged from a large tree falling on the infrastructure during a significant storm on 21 December 2018 .

$60,000 Expenditure Increase Beree-Badalla Cyclone Oma damage repair : Project 32097 Extensive damage to the Beree-Badalla boardwalk in Palm beach has been sustained during the Cyclone Oma event which has resulted in lifting of sections of the boardwalk which have resulted in many unstable sections of the structure. This funding allocation is required to make good these sections to allow safe passage for users. Attachment 1 Page 171 $92,000 Expenditure Increase Markeri Street Retaining Wall 2018-19 : Project 31929 The extent of works at this location has increased due to more significant vegetation clearing, footpath and curb and channel rectification and landscape treatments as a consequence of PB_019activities relating Budget to the removal Review of an asbestos - fenceDetail adjacent for to houses.FY 2018 - 2019 $87,600 Expenditure Increase Budget transfer from Parks operating budget centre CS4150O032 Parks and Landscape cost centre Maintenance Operating Projects (1007251) to capital project Queen Elizabeth Park Budget Centre Element Type 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 Irrigation 18-20 (Project 32079). The heavily used activation areas of the Coolangatta Foreshore parks have required irrigation to support their post event/ activation recovery. The project Initial Budget Revised Budget Proposed Budget March Review March Review March Review budget needs to be moved from Operating to Capital to meet our Asset Accounting obligations given the project has created a capital asset rather than just carried out a maintenance Recurrent Non-Recurrent Total Movement task. Movement Movement Lifestyle & Community Justification: $35,000 Expenditure Increase Budget transfer from operating budget centre CS4350O001 Heritage Buildings Maintenance cost centre Heritage Maintenance Projects (1007338) to capital project Schmidt Family Farm Re Stump (Project 32093). Project moved from Operating to Capital after review by Asset Accounting deeming that the maintenance carried out was Capital in nature.

($100,000) Expenditure Decrease Currumbin Hills Park amenity contribution : Project 31873 Funds were allocated as a contribution to a club project to construct new amenities however it was subject to the club gaining a grant. As the grant application was unsuccessful, project has been deferred pending suitable funding being sourced.

($90,000) Expenditure Decrease Pat Fagan Park Path Structure & Platform Renewal : Project 31803 Pat Fagan path structure renewal works have been cancelled as more extensive maintenance works performed in January have lifted the condition of the structure to a level 2-3 thus extending the life of the structure.

$183,000 Expenditure Decrease and Increase, Gold Coast Regional Botanic Garden -Ros Prepared Surfaces Pathway Renewal : Project 31840 to numerous other pathway and platform renewal projects.The market response for construction of this path required an engineered, rather than on-ground pathway which then triggered Disability Discrimination Act (DDA) compliance, resulting in significant cost increases unable to be funded within current budget. As result, a number of other pathway replacement projects are able to be funded and completed by the end of the financial year that were planned to be delivered in the 2019-20 financial year. The Projects brought forward include : $15,309 BOTANIC GARDEN-ROS Path & Plat renewal : Project 31800 $20,926 COVA PARK Path Structure & Platform Renewal : Project 31801 $9,765 WYBERBA Street Public Conveniences renewal : Project 31276 $40,000 Mangrove to Mountain Path Replacement : Project 32068 $17,000 Friends Centre Footpath Repair : Project 32069 $40,000 Feature Lake Timber Boardwalk Repair : Project 32070 $34,000 Botanic Garden Link Path : Project 31767 $6,000 Botanic Garden CCTV : Project 31766

Lions Park (Jacob Wells) Park Upgrade : Project 32067. Total Budget $94,000 These works are required as area requires constant maintenance to keep grass alive due to high traffic, lots of use and exposure to tough coastal environment. Project includes artificial turf and additional hard standing to prevent ongoing maintenance expenditure and to improve safety for visitors. The Project will be funded from Emergent Park Asset Works 2018-19 ($57,500) and ($36,500) under spends from 6 completed projects.

$15,000 Expenditure Budget created for Schuster's Park Playground : Project 32095. Contribution to LAW Project 26504 Schuster's Park Playground. This Project is a LAW funded project which relates to the replacement of an existing playground and construction of a new significantly improved playground. This budget is to cover the demolishment of the existing playground so that LAW funding is allocated to new play items. Funded from under spend on PB_019 Budget Review - Detail City of Gold Coast-IN-CONFIDENCE Page : 25 of 190 completed projects ($6,600) Post Office Park Buildings & Shed renewal : Project 31835 About this Report ($4,400) Coombabah Potting Shed : Project 31696 ($4,000) Hardy's House Termites : Project 31990 ($100,000) Revenue Increase $231,146 Expenditure Increase

($100,000) Revenue Increase, $100,000 Expenditure Increase Jacobs Well Skatepark Renewal : Project 31878. RESOLUTION G18.1207.007 allocated LAW funds from Division 1 to support the renewal and improvements to the skate park at Jacobs Well.

$36,146 Expenditure Increase Bochow Park Shelter and Picnic Renewal : Project 32087. Replace existing infrastructure from large tree damage. These works are required to replace a shelter and picnic settings that were damaged from a large tree falling on the infrastructure during a significant storm on 21 December 2018 .

$60,000 Expenditure Increase Beree-Badalla Cyclone Oma damage repair : Project 32097 Extensive damage to the Beree-Badalla boardwalk in Palm beach has been sustained during the Cyclone Oma event which has resulted in lifting of sections of the boardwalk which have resulted in many unstable sections of the structure. This funding allocation is required to make good these sections to allow safe passage for users.

$92,000 Expenditure Increase Markeri Street Retaining Wall 2018-19 : Project 31929 The extent of works at this location has increased due to more significant vegetation clearing, footpath and curb and channel rectification and landscape treatments as a consequence of activities relating to the removal of an asbestos fence adjacent to houses.

$87,600 Expenditure Increase Budget transfer from Parks operating budget centre CS4150O032 Parks and Landscape cost centre Maintenance Operating Projects (1007251) to capital project Queen Elizabeth Park Irrigation 18-20 (Project 32079). The heavily used activation areas of the Coolangatta Foreshore parks have required irrigation to support their post event/ activation recovery. The project budget needs to be moved from Operating to Capital to meet our Asset Accounting obligations given the project has created a capital asset rather than just carried out a maintenance task.

$35,000 Expenditure Increase Budget transfer from operating budget centre CS4350O001 Heritage Buildings Maintenance cost centre Heritage Maintenance Projects (1007338) to capital project Schmidt Family Farm Re Stump (Project 32093). Project moved from Operating to Capital after review by Asset Accounting deeming that the maintenance carried out was Capital in nature.

($100,000) Expenditure Decrease Currumbin Hills Park amenity contribution : Project 31873 Funds were allocated as a contribution to a club project to construct new amenities however it was subject to the club gaining a grant. As the grant application was unsuccessful, project has been deferred pending suitable funding being sourced.

($90,000) Expenditure Decrease Pat Fagan Park Path Structure & Platform Renewal : Project 31803 Pat Fagan path structure renewal works have been cancelled as more extensive maintenance works performed in January have lifted the condition of the structure to a level 2-3 thus extending the life of the structure.

$183,000 Expenditure Decrease and Increase, Gold Coast Regional Botanic Garden -Ros Prepared Surfaces Pathway Renewal : Project 31840 to numerous other pathway and platform renewal projects.The market response for construction of this path required an engineered, rather than on-ground pathway which then triggered Disability Discrimination Act (DDA) compliance, resulting in significant cost increases unable to be funded within current budget. As result, a number of other pathway replacement projects are able to be funded and completed by the end of the financial year that were planned to be delivered in the 2019-20 financial year. The Projects brought forward include : $15,309 BOTANIC GARDEN-ROS Path & Plat renewal : Project 31800 Attachment 1 $20,926 COVA PARK Path Structure & Platform Renewal : Project 31801 Page 172 $9,765 WYBERBA Street Public Conveniences renewal : Project 31276 $40,000 Mangrove to Mountain Path Replacement : Project 32068 $17,000 Friends Centre Footpath Repair : Project 32069 $40,000 Feature Lake Timber Boardwalk Repair : Project 32070 PB_019$34,000 Botanic Budget Garden Link PathReview : Project 31767 - Detail for FY 2018 - 2019 $6,000 Botanic Garden CCTV : Project 31766

LionsBudget Park Centre (Jacob Wells)Element Park Type Upgrade : Project 32067. Total2018 Budget - 2019 $94,000 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 These works are required as area requires constant maintenanceInitial Budget to keep grassRevised alive due Budget to high traffic,Proposed lots of use Budget and exposure Marchto tough Review coastal environment.March Project Review includes artificialMarch Review turf and additional hard standing to prevent ongoing maintenance expenditure and to improve safety for visitors. The Project will be fundedRecurrent from EmergentNon-Recurrent Park Asset Works 2018-19Total Movement ($57,500) and ($36,500) under spends from 6 completed projects. Movement Movement Lifestyle & Community $15,000 Expenditure Budget created for Schuster's Park Playground : Project 32095. ContributionJustification: to LAW Project 26504 Schuster's Park Playground. This Project is a LAW funded project which relates to the replacement of an existing playground and construction of a new significantly improved playground. This budget is to cover the demolishment of the existing playground so that LAW funding is allocated to new play items. Funded from under spend on completed projects ($6,600) Post Office Park Buildings & Shed renewal : Project 31835 ($4,400) Coombabah Potting Shed : Project 31696 ($4,000) Hardy's House Termites : Project 31990

CS4150O003 - Parks Operations-Public Conveniences Mtc Revenue 0 0 0 0 0 0 Expense 1,560,480 1,650,480 1,575,480 0 (75,000) (75,000) Net 1,560,480 1,650,480 1,575,480 0 (75,000) (75,000) Justification: ($75,000) Expenditure Decrease

Transfer of Budget to Parks budget centre CS4150O032 Parks and Landscape, cost centre SLA Gate Locking and Security. Security services in parks were budgeted into two main activities i.e park security (including gates opening and closing) and toilet security (including opening and closing). Currently all security contract services are settling to park security and not partly to toilet security so this change aligns budgets and costs. Net nil budget change.

PB_019 Budget Review - Detail City of Gold Coast-IN-CONFIDENCE Page : 26 of 190 About this Report Attachment 1 Page 173

PB_019 Budget Review - Detail for FY 2018 - 2019

Budget Centre Element Type 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 Initial Budget Revised Budget Proposed Budget March Review March Review March Review Recurrent Non-Recurrent Total Movement Movement Movement Lifestyle & Community

CS4150O004 - Parks Operations -Ext Contribution Works Revenue 0 0 (100,000) 0 (100,000) (100,000) Expense 0 0 100,000 0 100,000 100,000 Net 0 0 0 0 0 0 Justification: ($100,000) Revenue Increase $100,000 Expenditure Increase

Gold Coast Aquatic Centre and Environs repair road surface : Project 32106 Recognition of State Government reimbursement of make good rectification works at Gold Coast Aquatic Centre and Broadwater Parklands road repairs.

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PB_019 Budget Review - Detail for FY 2018 - 2019

Budget Centre Element Type 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 Initial Budget Revised Budget Proposed Budget March Review March Review March Review Recurrent Non-Recurrent Total Movement Movement Movement Lifestyle & Community

CS4150O005 - Park Facilities Repairs Revenue 0 (80,250) (80,250) 0 0 0 Expense 11,355,456 11,392,456 11,530,256 0 137,800 137,800 Net 11,355,456 11,312,206 11,450,006 0 137,800 137,800 Justification: $137,800 Expenditure Increase

$255,000 Expenditure Increase. Park & Recreational Services Water Charges Queensland has experienced the 5th warmest year on record and rainfall for the year ended 31 Jan 2019 was 340mm below average. Of note is that for the months between November and January rainfall was 255mm below average. The combination of low rainfall and high temperatures has resulted in significant increases in irrigation to protect important green assets such as playing surfaces.

($100,000) Expenditure Decrease. HOTA Facilities Maintenance A number of rectifications have been dealt with through contract defect liability conditions reducing the need to use the landscape budget. Combined with areas cordoned of by construction works, there has been less reliance on the current budget. The reduction is non-recurrent as the level of service requires increasing to a more appropriate level given the profile of the site.

($17,200) Expenditure Decrease, SLA Facility Contract Develop Fewer contracts have required renewing with some extensions and shared funding from other contract users has seen reduced expenditure.

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PB_019 Budget Review - Detail for FY 2018 - 2019

Budget Centre Element Type 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 Initial Budget Revised Budget Proposed Budget March Review March Review March Review Recurrent Non-Recurrent Total Movement Movement Movement Lifestyle & Community

CS4150O006 - Parks Mgt, Local Area Works & Operations Revenue 0 0 0 0 0 0 Expense 2,357,240 2,426,538 2,401,538 0 (25,000) (25,000) Net 2,357,240 2,426,538 2,401,538 0 (25,000) (25,000) Justification: ($25,000) Expenditure Decrease

A position was vacant for 3 months while being recruited which has generated a one-off saving.

CS4150O007 - Grassed Area Revenue 0 0 0 0 0 0 Expense 8,253,324 8,253,324 7,633,324 0 (620,000) (620,000) Net 8,253,324 8,253,324 7,633,324 0 (620,000) (620,000) Justification: ($620,000) Expenditure Decrease

Queensland has experienced the 5th warmest year on record and rainfall for the year ended 31 Jan 2019 was 340mm below average. Of note is that for the months between November and January rainfall was 255mm below average. The combination of low rainfall and high temperatures has resulted in 1 less mowing rotation. Whilst funds could be retained and grass cutting enhanced it is proposed to reduce this budget to assist in part to covering the significant costs associated with the storms in late December 2018.

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PB_019 Budget Review - Detail for FY 2018 - 2019

Budget Centre Element Type 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 Initial Budget Revised Budget Proposed Budget March Review March Review March Review Recurrent Non-Recurrent Total Movement Movement Movement Lifestyle & Community

CS4150O009 - Parks Tree Works Revenue 0 0 0 0 0 0 Expense 7,143,617 7,143,617 7,903,617 0 760,000 760,000 Net 7,143,617 7,143,617 7,903,617 0 760,000 760,000 Justification: $760,000 Expenditure Increase

On December 21 approximately at 5-30pm the City was affected by a significant wind storm. The following day a severe thunderstorm with strong winds, hail, and heavy rainfall impacted the City. Parks and Landscape Maintenance responded to 753 requests for service as a direct result of the storms. There were 72 emergency call-outs after hours across Friday evening and the weekend. Both internal crews and contractors were required in the response at a total cost in the order of $600,000. The requests included 24 made by Councillors, 417 by external customers and 312 by internal customers. Whilst the many areas of the City were impacted. more than one third of the requests came from the suburbs of Robina, Mudgeeraba, and Varsity. The requests related to uprooted and damaged trees, along with the clean-up of tree debris strewn across roads and our Parks. The initial response was to clear the debris from the roads to allow access for electricity repairs to overhead power lines and make areas safe for road users and pedestrians. The actual clean-up took 6 weeks in the worst affected areas.

CS4150O032 - Parks and Landscape Revenue (117,010) (117,010) (127,710) 0 (10,700) (10,700) Expense 18,338,630 18,477,340 18,215,440 (60,000) (201,900) (261,900) Net 18,221,620 18,360,330 18,087,730 (60,000) (212,600) (272,600)

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PB_019 Budget Review - Detail for FY 2018 - 2019

Budget Centre Element Type 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 Initial Budget Revised Budget Proposed Budget March Review March Review March Review Recurrent Non-Recurrent Total Movement Movement Movement Lifestyle & Community Justification: ($10,700) Revenue Increase ($261,900) Expenditure Decrease

($10,700) Revenue Increase $10,700 Expenditure Increase Recognition of invoices to the State Government for a small section of road reserve, which is now Civic Park. This was a temporary arrangement which was provided through partnering with the State. This arrangement has now ceased.

$75,000 Expenditure Increase Security services in parks were budgeted into two main activities i.e. park security (including gates opening and closing) and toilet security (including opening and closing). Currently all security contract services are settling to park security and not partly to toilet security so this change aligns budget and costs. Net nil budget change.

$40,000 Expenditure Increase Increase in Budget for SLA Carrara Zone. Carrara was one of the worst hit areas affected by the December 2018 storms and that required significant debris clean-up and increased budget to match.

($87,600) Expenditure Decrease Queen Elizabeth Park Irrigation project transferred to Capital to meet our Asset Accounting obligations given the project has created a capital asset rather than just carried out a maintenance task. The heavily used activation areas of the Coolangatta Foreshore parks have required irrigation to support their post event/ activation recovery.

($130,000) Expenditure Decrease Reduction of Budget for Parks cost centre HOTA Landscape Works. The cordoned of construction areas ( green bridge , car parks, gallery) have required less budgets to maintain these areas. The reduction is non-recurrent as the level of service requires increasing to a more appropriate level given the profile of the site.

($110,000) Expenditure Decrease Reduction of Budget for Parks cost centre Landscape Park Supervision and Work Dispatch Hub Operations. Targeted efficiency saving.

($60,000) Expenditure Decrease Reduction of Budget for Parks cost centre SLA Upper Coomera Zone. Outsourcing rural mowing reduced labour costs - transferred labour to Pimpama landscape that have absorbed labour positions.

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PB_019 Budget Review - Detail for FY 2018 - 2019

Budget Centre Element Type 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 Initial Budget Revised Budget Proposed Budget March Review March Review March Review Recurrent Non-Recurrent Total Movement Movement Movement Lifestyle & Community

CS4150O033 - Village Heart Revenue 0 0 0 0 0 0 Expense 815,000 815,000 433,550 (381,450) 0 (381,450) Net 815,000 815,000 433,550 (381,450) 0 (381,450) Justification: ($381,450) Expenditure Decrease

This budget review recommends that the operational budget for the Village Heart (VH) be reduced given the residential and commercial occupancy of the area is developing more slowly than forecast and some assets were delayed in being accepted by the City e.g. the water feature. The main areas of service adjusted in the 2018-19 budget are security (expected to be resourced by Smith Collective), grass area renovations (acceptable given events will not be progressed as previously forecast) cleaning of public areas and toilets (acceptable given use is expected to build more slowly than previously predicted and having less events) as well as a reduced contingency allowance. The level of maintenance will be reduced to be aligned with other profile parks.

CS4170O010 - Propagation/Translocation Numinbah Cons Revenue 0 (27,385) (97,385) 0 (70,000) (70,000) Expense 0 27,385 97,385 0 70,000 70,000 Net 0 0 (0) 0 (0) (0) Justification: ($70,000) Revenue Increase $70,000 Expenditure Increase

As part of the raising of the Hinze dam environmental approvals by the Federal government required SEQwater to establish areas to replace the impacts of the new dam levels on rare and threatened plant species . SEQwater have a contract with the City of Gold Coast where they pay Council to establish new areas of vegetation and undertake associated works to ensure the species are protected (PTP program). This budget adjustment recognises revenue of Quarter 1 invoice to SEQ Water for Hinze Dam PTP Expenses incurred during 1 October to December 2018.

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PB_019 Budget Review - Detail for FY 2018 - 2019

Budget Centre Element Type 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 Initial Budget Revised Budget Proposed Budget March Review March Review March Review Recurrent Non-Recurrent Total Movement Movement Movement Lifestyle & Community

CS4350O001 - Heritage Buildings Maintenance Revenue 0 0 0 0 0 0 Expense 42,300 42,300 7,300 0 (35,000) (35,000) Net 42,300 42,300 7,300 0 (35,000) (35,000) Justification: ($35,000) Expenditure Decrease

Transfer of Budget to Parks budget centre CS4150C010 Asset, Replacement, Renewal and Renovation, project Schmidt Family Farm Re Stumping (32093). Project transferred to Capital to meet our Asset Accounting obligations given the project has created a capital asset rather than just carried out a maintenance task.

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PB_019 Budget Review - Detail for FY 2018 - 2019

Budget Centre Element Type 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 Initial Budget Revised Budget Proposed Budget March Review March Review March Review Recurrent Non-Recurrent Total Movement Movement Movement Lifestyle & Community

CS4360C004 - Major Sporting Areas Revenue (2,520,002) (5,916,630) (4,096,630) 0 1,820,000 1,820,000 Expense 3,977,602 9,492,788 6,416,903 0 (3,075,885) (3,075,885) Net 1,457,600 3,576,158 2,320,273 0 (1,255,885) (1,255,885) Justification:

$1,820,000 Revenue Decrease ($3,075,885) Expenditure Decrease

$1,820,000 Revenue Decrease ($1,820,000) Expenditure Decrease Gainsborough Greens district sport LGIP : Project 31375 This budget adjustment reflects that in 2017-18 there was the recognition of $4M in infrastructure charges credits for sports field works. Whilst that was recognised, works under the Infrastructure Agreement (IA) have just now been completed. As such the budget in 2018-19 should not have duplicated the IA allocation and this review reflects that correction.

($1,125,000) Expenditure Decrease Equestrian Facilities : Project 32055 Council resolved LC18.1129.008 to retain funds for future equestrian facilities in response to needs triggered by the erosion at Charlies Crossing . That report advised "in addition to the above mentioned $800,000, it is anticipated to be an amount of approximately $375,000 remaining from storm damage funds, which this report recommends a future budget review consider be retained and allocated for rectification works to investigate options to relocate the club, or alternatively carry out bank stabilisation works." In relation to that various investigations are continuing and officers are reviewing reports on modelling by TMR associated with the John Muntz bridge which influences the future response to erosion at Charlies Crossing. All but $50,000 of the budget will be returned to Council in this budget review. Future allocation of funds for equestrian facilities will be subject to further consideration by Council.

($100,000) Expenditure Decrease Access Qld Ed Schools : Project 30003 Advice has been received that there will be a delay to the planned implementation of recycling water lines to enable irrigation to be connected to selected school sites. Works will be programmed accordingly in future years.

($30,885) Expenditure Decrease Luke Harrop High Performance Cycle Cct : Project 31375 Project was staged with final works to incorporate turning circle for riders. Due to high cost estimate and insufficient funds available, these works have been deferred.

PB_019 Budget Review - Detail City of Gold Coast-IN-CONFIDENCE Page : 34 of 190 About this Report Attachment 1 Page 181

PB_019 Budget Review - Detail for FY 2018 - 2019

Budget Centre Element Type 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 Initial Budget Revised Budget Proposed Budget March Review March Review March Review Recurrent Non-Recurrent Total Movement Movement Movement Lifestyle & Community

CS4360O003 - Facilities and Amenities Revenue (3,800) (17,162) (17,162) 0 0 0 Expense 453,543 466,905 766,905 0 300,000 300,000 Net 449,743 449,743 749,743 0 300,000 300,000 Justification: $300,000 Expenditure Increase

Helensvale Golf Course : Project 31731. This allocation is for funding to cover the cost of maintaining the Helensvale Golf Course. Council has previously resolved to maintain the Helensvale Golf Course as a site for golf. Recent attempts to attract an operator have been progressed and Council will need to consider its options for the site. A report is being prepared for Special Budget Committee on the site. In the interim there is a need to continue to undertake basic maintenance and continue a level of security at the site.

CS4360O010 - Sport & Rec Services Revenue (529,700) (529,700) (529,700) 0 0 0 Expense 898,309 898,309 860,309 0 (38,000) (38,000) Net 368,609 368,609 330,609 0 (38,000) (38,000) Justification: ($38,000) Expenditure Decrease

Budget adjusted with savings due to officer returning to work part time post maternity leave.

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PB_019 Budget Review - Detail for FY 2018 - 2019

Budget Centre Element Type 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 Initial Budget Revised Budget Proposed Budget March Review March Review March Review Recurrent Non-Recurrent Total Movement Movement Movement Lifestyle & Community

CS4360O011 - Sportsfield Maintenance Revenue 0 0 0 0 0 0 Expense 3,885,920 3,885,920 3,805,920 0 (80,000) (80,000) Net 3,885,920 3,885,920 3,805,920 0 (80,000) (80,000) Justification: ($80,000) Expenditure Decrease

Budget reduction targeted efficiency saving by not cylinder mowing given high quality of finish from mowing

PB_019 Budget Review - Detail City of Gold Coast-IN-CONFIDENCE Page : 36 of 190 About this Report Attachment 1 Page 183

PB_019 Budget Review - Detail for FY 2018 - 2019

Budget Centre Element Type 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 Initial Budget Revised Budget Proposed Budget March Review March Review March Review Recurrent Non-Recurrent Total Movement Movement Movement Lifestyle & Community

CS4450C002 - Swimming Pool Capital Revenue (2,781,600) (2,781,600) (2,931,600) 0 (150,000) (150,000) Expense 16,468,682 17,898,274 18,408,274 0 510,000 510,000 Net 13,687,082 15,116,674 15,476,674 0 360,000 360,000 Justification: ($150,000) Revenue Increase $510,000 Expenditure Increase

Revenue Increase ($150,000) $150,000 Expenditure Increase Palm Beach Aquatic Centre Allocation of $150,000 to develop a Master Plan to guide future redevelopment of the Palm Beach Aquatic Centre. The Master Planning exercise will build upon previous work that has been done in this area and will involve consultation with all relevant stakeholders. The work will be jointly funded with $75,000 from both Division 13 and Division 14 Local Area Works Programs 2018-19 and will be coordinated by Community Venues and Services (LC18.1018.005).

Expenditure Increase $360,000 Gold Coast Aquatic Centre Grand Stand Shade Sails Project 31762 Project scope has expanded to include a large shade sail structure to the upper western pool deck, and a smaller shade structure for the learn to swim pool. This increase has been funded by a transfer from the Office of the Chief Executive Officer CE8260O001 City Projects as part of the post Commonwealth Games legacy co-funded projects.

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PB_019 Budget Review - Detail for FY 2018 - 2019

Budget Centre Element Type 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 Initial Budget Revised Budget Proposed Budget March Review March Review March Review Recurrent Non-Recurrent Total Movement Movement Movement Lifestyle & Community

CS4450O001 - Helensvale Pool Revenue (38,800) (38,800) (76,280) (37,480) 0 (37,480) Expense 303,510 303,510 333,510 30,000 0 30,000 Net 264,710 264,710 257,230 (7,480) 0 (7,480) Justification: ( $37,480) Revenue Increase $30,000 Expenditure Increase

Budget changes as a result of changes to the management and operation contracts of City of Gold Coast Aquatic Centres - Council Resolution G18.0824.011 and LG314/411/19/001. The new contract makes the contractor responsible for electricity/power and water costs at the venue, and is forecast to offer an overall saving to Council.

Revenue Increase ($37,480) Changes to the management and operation of City of Gold Coast Aquatic Centres contract has resulted in the recoupment of electricity/power and water costs (for the remainder of the financial year), estimated revenue increase of ($63,350).Offsetting this, the original rent and lease revenue budget forecast was for a 12 month period under the former management contract, the revised contract model for contact managed pools is effective 1 November 2018. Revenue under old contract will only be generated for the period 1 July 2018 to 31 October 2018 resulting in a decrease to the budget of $25,870. In addition,

Expenditure Increase $30,000 Increase due to change in the management and operation contract of City of Gold Coast Aquatic Centres pro-rata management fee for period 1/11/18 to 30/06/19, additional costs are offset by recoupment of electricity/power and water costs.

PB_019 Budget Review - Detail City of Gold Coast-IN-CONFIDENCE Page : 38 of 190 About this Report Attachment 1 Page 185

PB_019 Budget Review - Detail for FY 2018 - 2019

Budget Centre Element Type 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 Initial Budget Revised Budget Proposed Budget March Review March Review March Review Recurrent Non-Recurrent Total Movement Movement Movement Lifestyle & Community

CS4450O002 - Miami Pool Revenue (310,700) (310,700) (310,700) 0 0 0 Expense 815,839 815,839 605,839 0 (210,000) (210,000) Net 505,139 505,139 295,139 0 (210,000) (210,000) Justification: ($210,000) Expenditure Decrease

Cost savings due to tighter control over contracts and due to reduction in operations and maintenance costs as the facility prepares for major redevelopment in late 2019 such as chemicals and gases ($60,000), electricity ($66,000) and other expenses ($84,000).

PB_019 Budget Review - Detail City of Gold Coast-IN-CONFIDENCE Page : 39 of 190 About this Report Attachment 1 Page 186

PB_019 Budget Review - Detail for FY 2018 - 2019

Budget Centre Element Type 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 Initial Budget Revised Budget Proposed Budget March Review March Review March Review Recurrent Non-Recurrent Total Movement Movement Movement Lifestyle & Community

CS4450O003 - Mudgeeraba Pool Revenue (7,300) (7,300) (92,410) (85,110) 0 (85,110) Expense 222,789 222,789 235,459 12,670 0 12,670 Net 215,489 215,489 143,049 (72,440) 0 (72,440) Justification: ($85,110) Revenue Increase $12,670 Expenditure Increase

Budget changes as a result of changes to the management and operation contracts of City of Gold Coast Aquatic Centres - Council Resolution G18.0824.011 and LG314/411/19/001. The new contract makes the contractor responsible for electricity/power and water costs at the venue, and is forecast to offer an overall saving to Council.

Revenue Increase ($85,110) Changes to the management and operation of City of Gold Coast Aquatic Centres contract resulted in the recoupment of electricity/power, gas and water costs (for the remainder of the financial year), estimated revenue increase of ($89,980). Offsetting this, the original rent and lease revenue budget forecast was for a 12 month period under the former management contract, the revised contract model for contact managed pools is effective 1 November 2018. Revenue under old contract will only be generated for the period 1 July 2018 to 31 October 2018 resulting in a decrease to the budget of $4,870.

Expenditure Increase $12,670 Increase due to change in the management and operation contract of City of Gold Coast Aquatic Centres pro-rata management fee for period 1/11/18 to 30/06/19, additional costs are offset by recoupment of electricity/power, gas and water costs.

PB_019 Budget Review - Detail City of Gold Coast-IN-CONFIDENCE Page : 40 of 190 About this Report Attachment 1 Page 187

PB_019 Budget Review - Detail for FY 2018 - 2019

Budget Centre Element Type 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 Initial Budget Revised Budget Proposed Budget March Review March Review March Review Recurrent Non-Recurrent Total Movement Movement Movement Lifestyle & Community

CS4450O004 - Nerang Pool Revenue (38,600) (38,600) (147,180) (108,580) 0 (108,580) Expense 465,739 465,739 531,729 65,990 0 65,990 Net 427,139 427,139 384,549 (42,590) 0 (42,590) Justification: ($108,580) Revenue Increase $65,990 Expenditure Increase

Budget changes as a result of changes to the management and operation contracts of City of Gold Coast Aquatic Centres - Council Resolution G18.0824.011 and LG314/411/19/001. The new contract makes the contractor responsible for electricity/power and water costs at the venue, and is forecast to offer an overall saving to Council.

Revenue Increase ($108,580) Changes to the management and operation of City of Gold Coast Aquatic Centres contract resulted in the recoupment of electricity/power and water costs (for the remainder of the financial year), estimated revenue increase of ($134,310).Offsetting this, the original rent and lease revenue budget forecast was for a 12 month period under the former management contract, the revised contract model for contact managed pools is effective 1 November 2018. Revenue under old contract will only be generated for the period 1 July 2018 to 31 October 2018 resulting in a decrease to the budget of $25,730.

Expenditure Increase $65,990 Increase due to change in the management and operation contract of City of Gold Coast Aquatic Centres pro-rata management fee for period 1/11/18 to 30/06/19, additional costs are offset by recoupment of electricity/power and water costs.

PB_019 Budget Review - Detail City of Gold Coast-IN-CONFIDENCE Page : 41 of 190 About this Report Attachment 1 Page 188

PB_019 Budget Review - Detail for FY 2018 - 2019

Budget Centre Element Type 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 Initial Budget Revised Budget Proposed Budget March Review March Review March Review Recurrent Non-Recurrent Total Movement Movement Movement Lifestyle & Community

CS4450O005 - Palm Beach Pool Revenue (2,027,100) (2,027,100) (2,317,100) (290,000) 0 (290,000) Expense 2,268,192 2,268,192 2,554,192 286,000 0 286,000 Net 241,092 241,092 237,092 (4,000) 0 (4,000) Justification: ($290,000) Revenue Increase $286,000 Expenditure Increase

Revenue Increase ($290,000) Patronage numbers have increased, resulting in an increase in revenue generated by the centre. Membership based programs (Fitness Centre, Learn to Swim, Swim Squad Programs) now exceeding that of the former operator. Aquatic Centre Membership ($70,000) Swimming Pool Entry Fees ($83,000) Swim Class Fees ($100,000) Merchandise Sales ($37,000)

Expenditure Increase $286,000 Chemical and gases $46,000. Original Business Case budget assumptions did not factor in lifeguard ratios over winter and peak summer, gym program fitness timetables and out of hours community access. In addition to this, through increased program offerings there is an associated increase in operating costs, $240,000

PB_019 Budget Review - Detail City of Gold Coast-IN-CONFIDENCE Page : 42 of 190 About this Report Attachment 1 Page 189

PB_019 Budget Review - Detail for FY 2018 - 2019

Budget Centre Element Type 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 Initial Budget Revised Budget Proposed Budget March Review March Review March Review Recurrent Non-Recurrent Total Movement Movement Movement Lifestyle & Community

CS4450O006 - Gold Coast Aquatic Centre Revenue (3,425,300) (3,429,299) (3,189,299) 0 240,000 240,000 Expense 4,060,688 4,060,688 4,060,688 0 0 0 Net 635,388 631,389 871,389 0 240,000 240,000 Justification: $240,000 Revenue Decrease

Expected shortfall in centre income due to a slower uptake of memberships and programs since opening the facility in Winter after close to 6 months closure for GC2018. Assumptions have factored in revenue uplift associated with Spring into Summer and school holiday activities over the summer period and planned and booked events. Gym Membership - $140,000 reduction Learn to Swim - $100,000 reduction

CS4450O007 - Woongoolba Pool Revenue (55,500) (55,500) (55,500) 0 0 0 Expense 321,753 321,753 275,753 0 (46,000) (46,000) Net 266,253 266,253 220,253 0 (46,000) (46,000) Justification: ($46,000) Expenditure Decrease

Expenditure savings due to reduction in maintenance ($40,000) and cleaning costs ($6,000) as the facility progresses to decommissioning in 2021.

PB_019 Budget Review - Detail City of Gold Coast-IN-CONFIDENCE Page : 43 of 190 About this Report Attachment 1 Page 190

PB_019 Budget Review - Detail for FY 2018 - 2019

Budget Centre Element Type 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 Initial Budget Revised Budget Proposed Budget March Review March Review March Review Recurrent Non-Recurrent Total Movement Movement Movement Lifestyle & Community

CS4450O012 - Upper Coomera Pool Operating Budget Revenue (797,900) (797,900) (631,800) 0 166,100 166,100 Expense 1,263,465 1,298,310 1,233,910 0 (64,400) (64,400) Net 465,565 500,410 602,110 0 101,700 101,700 Justification: $166,000 Revenue Decrease ($64,400) Expenditure Decrease

Revenue Decrease $166,000 Revenue forecasted for Cuppa Coomera will not meet budget. $16,000 is attributed to closure of Sunday trading due to high labour costs and limited sales. Sunday trading was ceased in September 2018 temporarily and permanently from January 2019. $150,000 resulting from downturn in business levels which can be partially attributed to loss of business in the community centre location and increase in competitors with a nearby, family run, cafe offering cheaper prices the opening of the Westfield Coomera Shopping Centre within a 5 minute drive that is offering a wide range of cafe and food and beverage offerings

($64,400) Expenditure Decrease Due to opening hours changing various costs such as labour ($44,400) and food and beverage purchases have decreased ($20,000).

CS4460O003 - Synergy Building - Broadbeach Revenue (37,600) (37,600) (37,600) 0 0 0 Expense 33,300 33,300 13,300 0 (20,000) (20,000) Net (4,300) (4,300) (24,300) 0 (20,000) (20,000) Justification: ($20,000) Expenditure Decrease

The setup and establishment of the Jubilee Off Street Car Park in Broadbeach was more than was estimated. Whilst not overspent, it is likely additional funds will be required to operate the now opened venue for the next few months. These funds are being transferred as a temporary measure to relieve possible overspends in that car park. This transfer sees no impact to the final budget outcome.

CS4470C002 - Tourist Parks - Capital PB_019 Budget Review - Detail City of Gold Coast-IN-CONFIDENCE Page : 44 of 190 About this Report Attachment 1 Page 191

PB_019 Budget Review - Detail for FY 2018 - 2019

Budget Centre Element Type 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 Initial Budget Revised Budget Proposed Budget March Review March Review March Review Recurrent Non-Recurrent Total Movement Movement Movement Lifestyle & Community CS4470C002 - Tourist Parks - Capital Revenue (3,089,363) (3,782,718) (2,736,291) 0 1,046,427 1,046,427 Expense 3,089,363 4,774,684 3,728,257 0 (1,046,427) (1,046,427) Net 0 991,966 991,966 0 0 0 Justification: $1,046,427 Revenue Decrease ($1,046,427) Expenditure Decrease

Expenditure Decrease of ($2,430,971), Expenditure Increase $1,384,543 Nett ($1,046,427)

($1,472,234) Removal of projects pending new Infrastructure Investment Plan The 2018-19 Capital budget was prepared in late 2017 ahead of the Council endorsement of the Gold Coast Tourist Parks’ vision and strategy. Objective 1 of the Strategy outlines the need for significant improvement and redevelopment of the current aged facilities to ensure they are befitting of the Caravan and Camping Industry which is a $19 billion industry and has grown year on year for the past 6 years. A new Infrastructure Investment Plan is currently being developed and all current renewal work has been assessed on a case by case basis to ensure that funds are not expended on facilities that will be replaced in the Investment Plan. As such, these projects have been removed from the current program to ensure that future funds and opportunity are available for the Investment Plan. The requirement to draw down on loan funds can be reduced by $1,472,234, and therefore present a savings to future debt and redemption payments until such works are determined with an appropriate return in investment based investment program. Currently the Gold Coast Tourist Parks earn $19 million in revenue and contribute $76 million to the local economy. Significant projects removed include:

($200,000) Project 31380 Tallebudgera Ck. TP Asset Renewal Program ($193,791) Project 30938 Broadwater TP Infrastructure Renewal Program ($154,534) Project 31386 Burleigh Beach TP Asset Renewal Program ($150,000) Project 31394 Kirra Beach TP Pre-Fab Amenity Block Acq ($150,000) Project 31390 Broadwater TP Safari Tents ($100,000) Project 31952 Talleb. Creek TP ReFitout 6th Ave Ame BI

($640,000) Savings due to villa refurbishment rather than replacement Estimates of $540,000 for Project 31946 Broadwater TP Replace 3 Waterfront Villa and $480,000 for Project 31387 Burleigh Beach TP Villa Replacement were based on the full replacement of three deluxe and three standard Villas respectively. The Structural Engineer's inspection determined that the structure of the Villas is sound and as such, it is appropriate to refurbish the Villas rather than replace them which will ensure that the full yield anticipated from the villas is received in their lifetime. The refurbishment of the Villas is estimated respectively at $65,000 and $60,000 each including improved decks, flooring, kitchen, bathroom, bedroom as well as furniture, fittings and equipment. Savings of ($340,000) Project 31946 and ($300,000) Project 31387.

($10,550)PB_019 Budget Budget Review reduction - Detail to actuals - completed project City of Gold Coast-IN-CONFIDENCE Page : 45 of 190 Project 31523 MBTP Pool Surface Refurbishment was completed under budget by $10,550. Budget reduced to actuals. About this Report Nil net impact - transfer Disability Access budget to specified project ($273,187) Project 30920 Asset Disability Access TP - transfer of funds to Project 31943 Main Beach Amenity Block - New. Note that funding for the DDA compliant accommodation at Tallebudgera Creek is not required as all 2018-19 proposed works have been put on hold pending the outcome of the Gold Coast Tourist Parks master planning that is being undertaken by Integrated Site Designs due to be completed April 2019.

$273,190 Project 31943 Main Beach Amenity Block - New - Renewal to New/Upgrade - Contribution from Project 30920 Disability Access TP project which holds funds for financial allocation to projects which have opportunity to upgrade accessibility functions in infrastructure. Total budget for project $773,187.

The cost estimate to complete the Main Beach Amenity Block Major Renovation project was in excess of $500,000. As the current block is well aged and in a prime site location, a new amenity block can be built in a currently unused area of the park which provides significant revenue returns, superior facilities and significantly improved disability access. The current location does not allow for safe disability access and is very difficult to navigate. The additional revenue expected to be earned from the sites is approximately $63,875 per annum ($12,000 per site x 5 sites average $50 per night x 273 nights per annum 70%)).

Expenditure Increase of $638,153 Due to the value of capital budget removed from the current year program, there is no requirement for additional funds to cover the forecast increases in expenditure as there will be a favourable net variance. These increases are due to new renewal projects, additional costs on current renewals, scope increases, and late costs on prior year completed projects.

$369,000 New renewals projects (identified in the current year) $210,000 Project 32058 Broadwater T Park-Ext Painting 25 Villas 25 Villas at the Broadwater Tourist Park are in need of external paint. Painting contractor estimate is $178,000, with additional costs for project delivery and supervision. This project is due to commence March 2019. $65,000 Project 32011Tallebudgera Ck.TP Electrical DSB Replace Replacement of Electrical Distribution Board. Currently the electrical distribution across the Park is very unbalanced and causes electrical outages during peak periods. Rebalancing this will ensure services are delivered to expected levels and also provides opportunity for future improvements to infrastructure. $50,000 Project 32059 Jacobs Well TP Camp Kitchen The current facilities are not in keeping with the quality and aesthetic expected in the caravan and camping industry. The Camp kitchen is the main cooking and social gathering area for this Park and the existing facilities have not been renewed for approximately 20 years. As such, they have the reached the end of their useful life. In addition a number of electrical additions over time have caused appliances to trip when they are used together - this will be corrected during this renewal. $20,000 Project 31525 MBTP Refurbish Ensuites The current facilities are not in keeping with the quality and aesthetic expected in the caravan and camping industry and will not achieve expected revenues if not renewed. $14,000 Kirra Beach Amenities Block Doors Project 31919 The current facilities are not in keeping with the safety expectations expected in the caravan and camping industry as the main amenity doors for male and female could not be locked. As such, it was necessary to install security doors with pin locks at each entry point to ensure guest safety and feelings of safety within our Parks. $10,000 OBTP Upgrade Distribution Boards Project 31519 Additional funds are required to be allocated to upgrade aged (end of life) Electrical Distribution Boards.

$140,030 Renewal projects - emergent works - additional costs $108,030 Project 31529 Jacobs Well TP Villa Repairs Current facilities are not in keeping with the quality and aesthetic expected in the caravan and camping industry and will not achieve expected revenues if not renewed. $20,000 Project 31528 JWTP Upgrade Distribution Boards Additional funds are required to be allocated to upgrade aged (end of life) Electrical Distribution Board. This project will also provide for future upgrades to electrical and correct the current power distribution coming from outside of park amenities rather than board within the Park. $12,000 Project 32032 MBTP Villa 12 & 7 - Floor Replacement Emergent renewal project required due to significant cracking in all tiles throughout Villas 7 and 12. This was caused by poor quality workmanship and required additional scope to be added to the project which was not discovered until the tiles had been removed.

$116,600 Scope increases - current year completed projects $116,600 Funds are required to be allocated to various current year completed projects which increased in scope, incurring unbudgeted costs such as additional compliance work, electrical works, pathways, landscaping and drainage.

$12,520 Late costs - prior year completed projects Funds are required to be allocated to various prior completed projects which had late costs applied.

Kirra Beach Tourist Park Manufactured Home Acquisition - $350,000 Expenditure Increase, $350,000 Transfer from Reserve A Kirra Beach Tourist Park manufactured home resident (site 154), has lodged an Expression of Interest to sell to Council - Special Circumstances for consideration. The special circumstances of the owner is supported by medical reports and is recommended to approve this request. The valuation of site 154 was completed in August 2018 by Taylor Byrne who have advised that, in their opinion, the market value of this property is $350,000. This acquisition is proposed to be funded by general borrowings (drawn back through the Tourist Park Reserve). $1,046,427 Revenue Decrease ($1,046,427) Expenditure Decrease

Expenditure Decrease of ($2,430,971), Expenditure Increase $1,384,543 Nett ($1,046,427)

($1,472,234) Removal of projects pending new Infrastructure Investment Plan The 2018-19 Capital budget was prepared in late 2017 ahead of the Council endorsement of the Gold Coast Tourist Parks’ vision and strategy. Objective 1 of the Strategy outlines the need for significant improvement and redevelopment of the current aged facilities to ensure they are befitting of the Caravan and Camping Industry which is a $19 billion industry and has grown year on year for the past 6 years. A new Infrastructure Investment Plan is currently being developed and all current renewal work has been assessed on a case by case basis to ensure that funds are not expended on facilities that will be replaced in the Investment Plan. As such, these projects have been removed from the current program to ensure that future funds and opportunity are available for the Investment Plan. The requirement to draw down on loan funds can be reduced by $1,472,234, and therefore present a savings to future debt and redemption payments until such works are determined with an appropriate return in investment based investment program. Currently the Gold Coast Tourist Parks earn $19 million in revenue and contribute $76 million to the local economy. Significant projects removed include: Attachment 1 ($200,000) Project 31380 Tallebudgera Ck. TP Asset Renewal Program Page 192 ($193,791) Project 30938 Broadwater TP Infrastructure Renewal Program ($154,534) Project 31386 Burleigh Beach TP Asset Renewal Program ($150,000) Project 31394 Kirra Beach TP Pre-Fab Amenity Block Acq ($150,000) Project 31390 Broadwater TP Safari Tents ($100,000)PB_019 Project Budget 31952 Talleb. Review Creek TP ReFitout - Detail 6th Ave for Ame BIFY 2018 - 2019

($640,000) Savings due to villa refurbishment rather than replacement Budget Centre Element Type 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 Estimates of $540,000 for Project 31946 Broadwater TP Replace 3 Waterfront Villa and $480,000 for Project 31387 Burleigh Beach TP Villa Replacement were based on the full Initial Budget Revised Budget Proposed Budget March Review March Review March Review replacement of three deluxe and three standard Villas respectively. The Structural Engineer's inspection determined that the structure of the Villas is sound and as such, it is appropriate Recurrent Non-Recurrent Total Movement to refurbish the Villas rather than replace them which will ensure that the full yield anticipated from the villas is received in their lifetime. The refurbishment of the Villas is estimated Movement Movement respectively at $65,000 and $60,000 each including improved decks, flooring, kitchen, bathroom, bedroom as well as furniture, fittings and equipment. Savings of ($340,000) Project Lifestyle31946 and ($300,000) & Community Project 31387. Justification: ($10,550) Budget reduction to actuals - completed project Project 31523 MBTP Pool Surface Refurbishment was completed under budget by $10,550. Budget reduced to actuals.

Nil net impact - transfer Disability Access budget to specified project ($273,187) Project 30920 Asset Disability Access TP - transfer of funds to Project 31943 Main Beach Amenity Block - New. Note that funding for the DDA compliant accommodation at Tallebudgera Creek is not required as all 2018-19 proposed works have been put on hold pending the outcome of the Gold Coast Tourist Parks master planning that is being undertaken by Integrated Site Designs due to be completed April 2019.

$273,190 Project 31943 Main Beach Amenity Block - New - Renewal to New/Upgrade - Contribution from Project 30920 Disability Access TP project which holds funds for financial allocation to projects which have opportunity to upgrade accessibility functions in infrastructure. Total budget for project $773,187.

The cost estimate to complete the Main Beach Amenity Block Major Renovation project was in excess of $500,000. As the current block is well aged and in a prime site location, a new amenity block can be built in a currently unused area of the park which provides significant revenue returns, superior facilities and significantly improved disability access. The current location does not allow for safe disability access and is very difficult to navigate. The additional revenue expected to be earned from the sites is approximately $63,875 per annum ($12,000 per site x 5 sites average $50 per night x 273 nights per annum 70%)).

Expenditure Increase of $638,153 Due to the value of capital budget removed from the current year program, there is no requirement for additional funds to cover the forecast increases in expenditure as there will be a favourable net variance. These increases are due to new renewal projects, additional costs on current renewals, scope increases, and late costs on prior year completed projects.

$369,000 New renewals projects (identified in the current year) $210,000 Project 32058 Broadwater T Park-Ext Painting 25 Villas 25 Villas at the Broadwater Tourist Park are in need of external paint. Painting contractor estimate is $178,000, with additional costs for project delivery and supervision. This project is due to commence March 2019. $65,000 Project 32011Tallebudgera Ck.TP Electrical DSB Replace Replacement of Electrical Distribution Board. Currently the electrical distribution across the Park is very unbalanced and causes electrical outages during peak periods. Rebalancing this will ensure services are delivered to expected levels and also provides opportunity for future improvements to infrastructure. $50,000 Project 32059 Jacobs Well TP Camp Kitchen The current facilities are not in keeping with the quality and aesthetic expected in the caravan and camping industry. The Camp kitchen is the main cooking and social gathering area for this Park and the existing facilities have not been renewed for approximately 20 years. As such, they have the reached the end of their useful life. In addition a number of electrical additions over time have caused appliances to trip when they are used together - this will be corrected during this renewal. $20,000 Project 31525 MBTP Refurbish Ensuites The current facilities are not in keeping with the quality and aesthetic expected in the caravan and camping industry and will not achieve expected revenues if not renewed. $14,000 Kirra Beach Amenities Block Doors Project 31919 The current facilities are not in keeping with the safety expectations expected in the caravan and camping industry as the main amenity doors for male and female could not be locked. As such,PB_019 it was Budget necessary Review - toDetail install security doors with pin locks at each entry point to ensure guestCity safety of Gold and Coast-IN-CONFIDENCE feelings of safety within our Parks. Page : 46 of 190 $10,000 OBTP Upgrade Distribution Boards Project 31519 About this Report Additional funds are required to be allocated to upgrade aged (end of life) Electrical Distribution Boards.

$140,030 Renewal projects - emergent works - additional costs $108,030 Project 31529 Jacobs Well TP Villa Repairs Current facilities are not in keeping with the quality and aesthetic expected in the caravan and camping industry and will not achieve expected revenues if not renewed. $20,000 Project 31528 JWTP Upgrade Distribution Boards Additional funds are required to be allocated to upgrade aged (end of life) Electrical Distribution Board. This project will also provide for future upgrades to electrical and correct the current power distribution coming from outside of park amenities rather than board within the Park. $12,000 Project 32032 MBTP Villa 12 & 7 - Floor Replacement Emergent renewal project required due to significant cracking in all tiles throughout Villas 7 and 12. This was caused by poor quality workmanship and required additional scope to be added to the project which was not discovered until the tiles had been removed.

$116,600 Scope increases - current year completed projects $116,600 Funds are required to be allocated to various current year completed projects which increased in scope, incurring unbudgeted costs such as additional compliance work, electrical works, pathways, landscaping and drainage.

$12,520 Late costs - prior year completed projects Funds are required to be allocated to various prior completed projects which had late costs applied.

Kirra Beach Tourist Park Manufactured Home Acquisition - $350,000 Expenditure Increase, $350,000 Transfer from Reserve A Kirra Beach Tourist Park manufactured home resident (site 154), has lodged an Expression of Interest to sell to Council - Special Circumstances for consideration. The special circumstances of the owner is supported by medical reports and is recommended to approve this request. The valuation of site 154 was completed in August 2018 by Taylor Byrne who have advised that, in their opinion, the market value of this property is $350,000. This acquisition is proposed to be funded by general borrowings (drawn back through the Tourist Park Reserve). $1,046,427 Revenue Decrease ($1,046,427) Expenditure Decrease

Expenditure Decrease of ($2,430,971), Expenditure Increase $1,384,543 Nett ($1,046,427)

($1,472,234) Removal of projects pending new Infrastructure Investment Plan The 2018-19 Capital budget was prepared in late 2017 ahead of the Council endorsement of the Gold Coast Tourist Parks’ vision and strategy. Objective 1 of the Strategy outlines the need for significant improvement and redevelopment of the current aged facilities to ensure they are befitting of the Caravan and Camping Industry which is a $19 billion industry and has grown year on year for the past 6 years. A new Infrastructure Investment Plan is currently being developed and all current renewal work has been assessed on a case by case basis to ensure that funds are not expended on facilities that will be replaced in the Investment Plan. As such, these projects have been removed from the current program to ensure that future funds and opportunity are available for the Investment Plan. The requirement to draw down on loan funds can be reduced by $1,472,234, and therefore present a savings to future debt and redemption payments until such works are determined with an appropriate return in investment based investment program. Currently the Gold Coast Tourist Parks earn $19 million in revenue and contribute $76 million to the local economy. Significant projects removed include:

($200,000) Project 31380 Tallebudgera Ck. TP Asset Renewal Program ($193,791) Project 30938 Broadwater TP Infrastructure Renewal Program ($154,534) Project 31386 Burleigh Beach TP Asset Renewal Program ($150,000) Project 31394 Kirra Beach TP Pre-Fab Amenity Block Acq ($150,000) Project 31390 Broadwater TP Safari Tents ($100,000) Project 31952 Talleb. Creek TP ReFitout 6th Ave Ame BI

($640,000) Savings due to villa refurbishment rather than replacement Estimates of $540,000 for Project 31946 Broadwater TP Replace 3 Waterfront Villa and $480,000 for Project 31387 Burleigh Beach TP Villa Replacement were based on the full replacement of three deluxe and three standard Villas respectively. The Structural Engineer's inspection determined that the structure of the Villas is sound and as such, it is appropriate to refurbish the Villas rather than replace them which will ensure that the full yield anticipated from the villas is received in their lifetime. The refurbishment of the Villas is estimated respectively at $65,000 and $60,000 each including improved decks, flooring, kitchen, bathroom, bedroom as well as furniture, fittings and equipment. Savings of ($340,000) Project 31946 and ($300,000) Project 31387.

($10,550) Budget reduction to actuals - completed project Project 31523 MBTP Pool Surface Refurbishment was completed under budget by $10,550. Budget reduced to actuals.

Nil net impact - transfer Disability Access budget to specified project ($273,187) Project 30920 Asset Disability Access TP - transfer of funds to Project 31943 Main Beach Amenity Block - New. Note that funding for the DDA compliant accommodation at Tallebudgera Creek is not required as all 2018-19 proposed works have been put on hold pending the outcome of the Gold Coast Tourist Parks master planning that is being undertaken by Integrated Site Designs due to be completed April 2019.

$273,190 Project 31943 Main Beach Amenity Block - New - Renewal to New/Upgrade - Contribution from Project 30920 Disability Access TP project which holds funds for financial allocation to projects which have opportunity to upgrade accessibility functions in infrastructure. Total budget for project $773,187.

The cost estimate to complete the Main Beach Amenity Block Major Renovation project was in excess of $500,000. As the current block is well aged and in a prime site location, a new amenity block can be built in a currently unused area of the park which provides significant revenue returns, superior facilities and significantly improved disability access. The current location does not allow for safe disability access and is very difficult to navigate. The additional revenue expected to be earned from the sites is approximately $63,875 per annum ($12,000 per site x 5 sites average $50 per night x 273 nights per annum 70%)).

Expenditure Increase of $638,153 Due to the value of capital budget removed from the current year program, there is no requirement for additional funds to cover the forecast increases in expenditure as there will be a favourable net variance. These increases are due to new renewal projects, additional costs on current renewals, scope increases, and late costs on prior year completed projects.Attachment 1 Page 193 $369,000 New renewals projects (identified in the current year) $210,000 Project 32058 Broadwater T Park-Ext Painting 25 Villas 25 Villas at the Broadwater Tourist Park are in need of external paint. Painting contractor estimate is $178,000, with additional costs for project delivery and supervision. This project is due to commence March 2019. PB_019$65,000 Project Budget 32011Tallebudgera Review Ck.TP Electrical - Detail DSB Replace for FY 2018 - 2019 Replacement of Electrical Distribution Board. Currently the electrical distribution across the Park is very unbalanced and causes electrical outages during peak periods. Rebalancing this will ensure services are delivered to expected levels and also provides opportunity for future improvements to infrastructure. $50,000Budget CentreProject 32059Element Jacobs Type Well TP Camp Kitchen 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 The current facilities are not in keeping with the quality andInitial aesthetic Budget expectedRevised in the caravan Budget and campingProposed industry. Budget The Camp kitchenMarch is Review the main cookingMarch and social Review gathering area forMarch Review this Park and the existing facilities have not been renewed for approximately 20 years. As such, they have the reached the end of theirRecurrent useful life. In additionNon-Recurrent a number of electrical Total Movement additions over time have caused appliances to trip when they are used together - this will be corrected during this renewal. Movement Movement Lifestyle$20,000 Project & Community31525 MBTP Refurbish Ensuites The current facilities are not in keeping with the quality and aesthetic expected in the caravan and camping industry and will not achieve expected revenues if not renewed. $14,000Justification: Kirra Beach Amenities Block Doors Project 31919 The current facilities are not in keeping with the safety expectations expected in the caravan and camping industry as the main amenity doors for male and female could not be locked. As such, it was necessary to install security doors with pin locks at each entry point to ensure guest safety and feelings of safety within our Parks. $10,000 OBTP Upgrade Distribution Boards Project 31519 Additional funds are required to be allocated to upgrade aged (end of life) Electrical Distribution Boards.

$140,030 Renewal projects - emergent works - additional costs $108,030 Project 31529 Jacobs Well TP Villa Repairs Current facilities are not in keeping with the quality and aesthetic expected in the caravan and camping industry and will not achieve expected revenues if not renewed. $20,000 Project 31528 JWTP Upgrade Distribution Boards Additional funds are required to be allocated to upgrade aged (end of life) Electrical Distribution Board. This project will also provide for future upgrades to electrical and correct the current power distribution coming from outside of park amenities rather than board within the Park. $12,000 Project 32032 MBTP Villa 12 & 7 - Floor Replacement Emergent renewal project required due to significant cracking in all tiles throughout Villas 7 and 12. This was caused by poor quality workmanship and required additional scope to be added to the project which was not discovered until the tiles had been removed.

$116,600 Scope increases - current year completed projects $116,600 Funds are required to be allocated to various current year completed projects which increased in scope, incurring unbudgeted costs such as additional compliance work, electrical works, pathways, landscaping and drainage.

$12,520 Late costs - prior year completed projects Funds are required to be allocated to various prior completed projects which had late costs applied.

Kirra Beach Tourist Park Manufactured Home Acquisition - $350,000 Expenditure Increase, $350,000 Transfer from Reserve A Kirra Beach Tourist Park manufactured home resident (site 154), has lodged an Expression of Interest to sell to Council - Special Circumstances for consideration. The special circumstances of the owner is supported by medical reports and is recommended to approve this request. The valuation of site 154 was completed in August 2018 by Taylor Byrne who have advised that, in their opinion, the market value of this property is $350,000. This acquisition is proposed to be funded by general borrowings (drawn back through the Tourist Park Reserve).

PB_019 Budget Review - Detail City of Gold Coast-IN-CONFIDENCE Page : 47 of 190 About this Report Attachment 1 Page 194

PB_019 Budget Review - Detail for FY 2018 - 2019

Budget Centre Element Type 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 Initial Budget Revised Budget Proposed Budget March Review March Review March Review Recurrent Non-Recurrent Total Movement Movement Movement Lifestyle & Community

CS4470N001 - Income Tax Equivalent - Tourist Pks Revenue 0 0 0 0 0 0 Expense 1,676,277 1,676,277 1,421,150 0 (255,127) (255,127) Net 1,676,277 1,676,277 1,421,150 0 (255,127) (255,127) Justification: $255,127 Expenditure Decrease

Reduction in income tax equivalent payments made by Tourist Parks. Reduced profitability of the Parks as a consequence of lower revenues and additional maintenance costs have been the primary driver of this reduction.

CS4470N002 - Dividend Tourist Parks to Council Revenue 0 0 0 0 0 0 Expense 2,206,248 2,206,248 2,417,320 0 211,072 211,072 Net 2,206,248 2,206,248 2,417,320 0 211,072 211,072 Justification: $211,072 Expenditure Increase

In light of 2018-19 financial performance, the dividend to Council would normally fall but it is proposed remove the transfer to Tourist Park reserves from the budget and pay this as a dividend to offset any dividend fall and also to partly offset the reduced income tax equivalent payment.

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PB_019 Budget Review - Detail for FY 2018 - 2019

Budget Centre Element Type 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 Initial Budget Revised Budget Proposed Budget March Review March Review March Review Recurrent Non-Recurrent Total Movement Movement Movement Lifestyle & Community

CS4470O001 - Transfer To Reserve - Tourist Parks Revenue 0 0 0 0 0 0 Expense 766,727 684,754 0 0 (684,754) (684,754) Net 766,727 684,754 0 0 (684,754) (684,754) Justification: $684,754 Expenditure Decrease

In light 2018-19 financial performance, it is proposed to remove the budgeted transfer to Tourist Park reserve and use these funds to offset the reduction in dividend and income tax equivalents through the payment of additional dividend.

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PB_019 Budget Review - Detail for FY 2018 - 2019

Budget Centre Element Type 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 Initial Budget Revised Budget Proposed Budget March Review March Review March Review Recurrent Non-Recurrent Total Movement Movement Movement Lifestyle & Community

CS4470O003 - Tourist Park General Operation Revenue 0 0 0 0 0 0 Expense 1,228,063 1,319,357 1,409,357 0 90,000 90,000 Net 1,228,063 1,319,357 1,409,357 0 90,000 90,000 Justification: $90,000 Expenditure Increase

$40,000 Asset Audit condition Report - a further $40,000 is required for the full asset condition audit to capture all assets across the seven mainland Gold Coast Tourist Parks at an average of $12,500 per park for the full audit, data sheet (SAP ready) and report. The current register is insufficient for good asset lifecycle management as it currently captures around 5,000 assets which is less than half the actual number of assets and cannot be used for renewal or maintenance planning. This work was necessary to complete our Asset Management Plan with sufficient detail and accuracy to ensure meaningful data is captured to feed into the business and City long term planning.

$19,000 Arc Blue Consulting - Management Gold Coast Tourist Parks specification documentation - The tender for the Management of the Gold Coast Tourist Parks is due to go back to market in July 2019 after a decision has been made to not take-up extension options. There have been a number of issues with the current contract and a marked change in the way that the industry now contracts managers. A procurement and contracting specialist has been engaged to assist in re-writing the procurement/specification documents to ensure that our contracts, potentially worth $16 million over the next 5 years, provide the best value for money for the city together with the best outcome for our guests. This represents .001% of total contract value.

$14,000 Expected procurement costs for the tender process for the Management of Gold Coast Tourist Park contracts - The tender for the Management of the Gold Coast Tourist Parks is due to go back to market in July 2019 after a decision has been made to not take-up extension options. Cost to undertake procurement activities is $10,000 plus advertising, market and social engagement costs. This was not budgeted as the contract does not expire until October-November 2019 however the majority of the procurement activity and cost will fall in 2018-19 due to the early engagement process to be undertaken for better market and social engagement.

$17,000 Integrated Site Designs - Funding for the Gold Coast Tourist Parks Investment Plan, including survey planning and other costs was originally $200,000 split over 2018 and 2019 at $100,000 per year. All costs will now fall within the 2018-19 financial year as Integrated Site Designs have now been engaged in the current financial year with a completion date of April 2019. In addition, use has been made of the majority of existing older survey plans which have been updated manually for the purpose of the higher level Investment Plan. Total engagement costs will be $127,000 (representing savings against the original $200,000). As such an additional $17,000 is required this financial year to fund and complete the project.

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PB_019 Budget Review - Detail for FY 2018 - 2019

Budget Centre Element Type 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 Initial Budget Revised Budget Proposed Budget March Review March Review March Review Recurrent Non-Recurrent Total Movement Movement Movement Lifestyle & Community

CS4470O004 - Tallebudgera Tourist Park Revenue (5,705,900) (5,705,900) (5,705,900) 0 0 0 Expense 2,288,364 2,288,364 2,429,254 0 140,890 140,890 Net (3,417,536) (3,417,536) (3,276,646) 0 140,890 140,890 Justification: $140,890 Expenditure Increase

The total budget required for maintenance of the Tallebudgera Tourist Park is $317,190, which is $140,890 greater than the original adopted budget of $176,300 for Planned and Reactive Maintenance. Reactive maintenance has significantly increased due to ageing of the asset base as identified through the Tourist Park Strategy. With planned renewal programs progressing through the last quarter of 2018-19 and 2019-20 this will be adjusted back over time. $34,860 Non-recurrent unplanned additional budget required for Level 1 & 2 electrical testing which has become urgent due to a number of recent power outages effecting the whole park.

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PB_019 Budget Review - Detail for FY 2018 - 2019

Budget Centre Element Type 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 Initial Budget Revised Budget Proposed Budget March Review March Review March Review Recurrent Non-Recurrent Total Movement Movement Movement Lifestyle & Community

CS4470O006 - Main Beach Tourist Park Revenue (2,684,960) (2,684,960) (2,546,061) 0 138,899 138,899 Expense 1,378,209 1,428,209 1,428,209 0 0 0 Net (1,306,751) (1,256,751) (1,117,852) 0 138,899 138,899 Justification: $138,899 Revenue Decrease

The current projected revenue for Main Beach Tourist Park is lower than forecast budget. A 5% adjustment is required to the current budget which was set late 2017 before heavy discounting from other accommodation providers was known and has impacted on the ability for us to continue to achieve high occupancy together with high room rates. This has mainly impacted the two parks central to Surfers Paradise. Main Beach Tourist Park is forecast to achieve $2.5 million (95% of the initial revenue forecast) and there is a continued focus on increasing our marketing channels and improving our stock to ensure we remain competitive in a market which continues to grow. Gold Coast Tourist Parks continue to exceed industry benchmarks by way of occupancy and room rates. $80,000 - Tourist Parks - Cabin Accommodation reduction $58,899 - Tourist Parks - Tourists reduction

PB_019 Budget Review - Detail City of Gold Coast-IN-CONFIDENCE Page : 52 of 190 About this Report Attachment 1 Page 199

PB_019 Budget Review - Detail for FY 2018 - 2019

Budget Centre Element Type 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 Initial Budget Revised Budget Proposed Budget March Review March Review March Review Recurrent Non-Recurrent Total Movement Movement Movement Lifestyle & Community

CS4470O009 - Broadwater Tourist Park Revenue (4,401,480) (4,401,480) (4,142,460) 0 259,020 259,020 Expense 2,307,568 2,307,568 2,407,568 0 100,000 100,000 Net (2,093,912) (2,093,912) (1,734,892) 0 359,020 359,020 Justification: $259,020 Revenue Decrease $100,000 Expenditure Increase

Revenue Decrease $259,020 The current projected revenue for Broadwater Tourist Park is lower than forecast budget. A 5.8% adjustment is required to the current budget which was set late 2017 before heavy discounting from other accommodation providers was known and has impacted on the ability for us to continue to achieve high occupancy together with high room rates. Broadwater Tourist Park is forecast to achieve $4.1 million (94.2% of the initial revenue forecast) and there is a continued focus on increasing our marketing channels and improving our stock to ensure we remain competitive in a market which continues to grow. Gold Coast Tourist Parks continue to exceed industry benchmarks by way of occupancy and room rates. $90,000 - Tourist Parks - Cabin Accommodation reduction $125,720 - Tourist Parks - Tourists reduction $9,300 - Tourist Parks - Permanents reduction $26,000 -Tourist Parks - Washing Machines reduction $8,000 - Tourist Parks - Sales reduction

Expenditure Increase $110,000 The total budget required for maintenance of the Broadwater Tourist Park is $165,660 which is $100,000 greater than original budget of $65,660 for Planned and Reactive Maintenance Reactive maintenance has significantly increased due to ageing of the asset base as identified through the Tourist Park Strategy. With planned renewal programs progressing through the last quarter of 2018-19 and 2019-20 this will be adjusted back over time. $25,700 Non-recurrent unplanned additional budget required for Level 1 & 2 electrical testing which has become urgent.

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PB_019 Budget Review - Detail for FY 2018 - 2019

Budget Centre Element Type 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 Initial Budget Revised Budget Proposed Budget March Review March Review March Review Recurrent Non-Recurrent Total Movement Movement Movement Lifestyle & Community

CS4500O001 - Health&Reg Admin -Office Furniture&Equip Revenue 0 0 0 0 0 0 Expense 15,000 15,000 6,600 0 (8,400) (8,400) Net 15,000 15,000 6,600 0 (8,400) (8,400) Justification: ($8,400) Expenditure Decrease

Demand for new/replacement furniture is below budget. Current furniture etc. is still at acceptable standard.

CS4500O002 - Health & Reg Admin - Recruitment Revenue 0 0 0 0 0 0 Expense 16,600 16,600 6,600 0 (10,000) (10,000) Net 16,600 16,600 6,600 0 (10,000) (10,000) Justification: ($10,000) Expenditure Decrease

Branch recruitment activities have not required significant expenditure.

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PB_019 Budget Review - Detail for FY 2018 - 2019

Budget Centre Element Type 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 Initial Budget Revised Budget Proposed Budget March Review March Review March Review Recurrent Non-Recurrent Total Movement Movement Movement Lifestyle & Community

CS4500O003 - Health&Reg Admn-Minor Equip Purch<$10000 Revenue 0 0 0 0 0 0 Expense 110,100 110,100 37,100 0 (73,000) (73,000) Net 110,100 110,100 37,100 0 (73,000) (73,000) Justification: ($73,000) Expenditure Decrease

The requirement to replace minor equipment is below budget this financial year, current equipment is still usable and serviceable.

CS4500O004 - Health&Reg-Comp Hardware/Software<$10000 Revenue 0 0 0 0 0 0 Expense 109,000 109,000 40,000 0 (69,000) (69,000) Net 109,000 109,000 40,000 0 (69,000) (69,000) Justification: ($69,000) Expenditure Decrease

Additional mobility and other ICT equipment provided during the Commonwealth Games delivery reduced the requirement for new and replacement of Hardware and Software. These savings is being offset by additional mobile network costs to enable in field computing.

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PB_019 Budget Review - Detail for FY 2018 - 2019

Budget Centre Element Type 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 Initial Budget Revised Budget Proposed Budget March Review March Review March Review Recurrent Non-Recurrent Total Movement Movement Movement Lifestyle & Community

CS4500O005 - Health & Regulatory - Administration Revenue 0 0 0 0 0 0 Expense 862,826 1,067,826 1,222,826 0 155,000 155,000 Net 862,826 1,067,826 1,222,826 0 155,000 155,000 Justification: $155,000 Expenditure Increase

$120,000 Funding increase required to the Branch communications budgets. New infield mobility use of iPads and Laptops delivers efficiencies and requires access to data/mobile phone networks. These costs previously funded from the Commonwealth Games budgets. $75,000 Additional funding for the Branch Consultancy budget to allow the commencement of the Lifeguard Services Review this financial year. ($40,000) Labour budget reduced this financial year due to savings realised. Not all the funds reprovided from 2017/18 to progress the Service Delivery Review (SDR) implementation were required.

CS4500O007 - Health&Reg Admin - Ext Training Overhead Revenue 0 0 0 0 0 0 Expense 9,100 9,100 14,100 0 5,000 5,000 Net 9,100 9,100 14,100 0 5,000 5,000 Justification: $5,000 Expenditure Increase

The Branch hosted the State Environmental Health Conference, this resulted in above "business as usual" costs.

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PB_019 Budget Review - Detail for FY 2018 - 2019

Budget Centre Element Type 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 Initial Budget Revised Budget Proposed Budget March Review March Review March Review Recurrent Non-Recurrent Total Movement Movement Movement Lifestyle & Community

CS4510O001 - City Standards Operations Revenue (168,095) (168,095) (168,095) 0 0 0 Expense 3,590,802 3,590,802 3,490,802 0 (100,000) (100,000) Net 3,422,707 3,422,707 3,322,707 0 (100,000) (100,000) Justification: ($100,000) Expenditure Decrease

Labour budget savings this financial year due to long term illnesses and difficulty in backfilling various positions.

CS4560C001 - Animal Control - Capital Revenue 0 0 0 0 0 0 Expense 132,379 144,140 169,734 0 25,594 25,594 Net 132,379 144,140 169,734 0 25,594 25,594 Justification: $25,594 Expenditure Increase

Project 30025 (Asset Renewal Animal Management) Funding transferred from the Operating budget for Stapylton Pound Operations 1004668 to fund renewal and major enhancements to the old fence at the Stapylton Pound 30025.

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PB_019 Budget Review - Detail for FY 2018 - 2019

Budget Centre Element Type 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 Initial Budget Revised Budget Proposed Budget March Review March Review March Review Recurrent Non-Recurrent Total Movement Movement Movement Lifestyle & Community

CS4560O002 - Animal Control - Operations Revenue (3,369,280) (3,369,280) (3,369,280) 0 0 0 Expense 5,233,321 5,315,721 5,038,472 0 (277,249) (277,249) Net 1,864,041 1,946,441 1,669,192 0 (277,249) (277,249) Justification: ($277,249) Expenditure Decrease

($82,400) Saving realised this financial year as not all funds reprovided from 2017/18 to progress Service Delivery Review (SDR) implementation have been required. ($136,480) Supervisor Animal Management position CM920 vacant during the 2018-19 financial year was re-purposed in line with the Branch Service Delivery Review (SDR). ($32,775) CM596 - Animal Management Officer position CM596 vacant 50% of the year Officer due to Long Term City Cover Claim. ($25,594) Funding transferred from the Stapylton Pound Operations budget - CC 1006448 to fund renewal and major enhancements to the old fence at the Stapylton Pound - CS4560C001 project 30025.

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PB_019 Budget Review - Detail for FY 2018 - 2019

Budget Centre Element Type 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 Initial Budget Revised Budget Proposed Budget March Review March Review March Review Recurrent Non-Recurrent Total Movement Movement Movement Lifestyle & Community

CS4570O002 - Regulated Parking Revenue (18,119,661) (18,119,661) (18,725,285) 0 (605,624) (605,624) Expense 11,252,633 11,210,133 10,655,369 0 (554,764) (554,764) Net (6,867,028) (6,909,528) (8,069,916) 0 (1,160,388) (1,160,388) Justification: ($605,624) Revenue Increase ($554,764) Expenditure Decrease

Revenue Increase ($1,063,624) ($963,080) Revenue increase for Bad Debts Recovered. This represents recovery of infringements which have previously been written out of the Councils accounts in line with the policy of writing off all debts that have been with the State Penalty Enforcement Register (SPER) for over 12 months. ($15,544) Revenue increase for SPER registration recoupment fee also received after previously having been written off. ($85,000) Revenue Increase for Infringements Fines. This increase to the budget is possible due to the availability of a casual staff pool which has reduced the impact of short term/ unforeseen staff absenteeism due to leave and resignations on the current year's budget.

Expenditure Decrease $96,764 ($164,000) Legal fee budgets reduction due to an increase in court elections being finalised prior to being heard in court and an increase in persons providing further information to the City before electing to go to court. ($62,000) Various materials and services budgets such a staff uniforms, cleaning, printing, equipment and supplies and postage were reduced this financial year. $129,236 Additional overtime for the Administration team required due to a back log in correspondence received by Council. This also resulted in City Parking funding and additional full time administration temp. officer to register and action customer requests into Pathway.

Revenue Decrease $458,000 Expenditure Decrease ($458,000) Fewer overdue infringements have been referred to SPER than anticipated this financial Year, this has resulted in a reduction in our SPER recovery costs and also the corresponding SPER cost recovery revenue we subsequently collect.

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PB_019 Budget Review - Detail for FY 2018 - 2019

Budget Centre Element Type 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 Initial Budget Revised Budget Proposed Budget March Review March Review March Review Recurrent Non-Recurrent Total Movement Movement Movement Lifestyle & Community

CS4590O002 - Env Health & City Law Serv Operations Revenue (834,140) (834,140) (468,300) 0 365,840 365,840 Expense 9,612,217 9,926,392 9,837,392 0 (89,000) (89,000) Net 8,778,077 9,092,252 9,369,092 0 276,840 276,840 Justification: $365,840 Revenue Decrease ($89,000) Expenditure Decrease

Revenue Decrease $365,840 $393,040 Revenue decrease due to the number of Penalty Infringement Notices and prosecutions being down, this is primarily due to less litter and environmental offences being detected. Many regulated activities were also brought into high levels of compliance in preparation for the Commonwealth Games. ($27,200) Revenue increase. Abandoned Vehicles auctions realised higher than anticipated prices.

Expenditure ($89,000) ($40,000) Expenditure decrease to the Parks Supervision budget. City Laws staff are delivering enforcement services to City Parks using "business as usual" operational funds. ($49,000) Expenditure decrease for Local Law State Penalty Enforcement Register (SPER) lodgement fees due to fewer PINs issued and referred to SPER than anticipated.

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PB_019 Budget Review - Detail for FY 2018 - 2019

Budget Centre Element Type 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 Initial Budget Revised Budget Proposed Budget March Review March Review March Review Recurrent Non-Recurrent Total Movement Movement Movement Lifestyle & Community

CS4600O001 - Cemetery Operations Revenue (1,518,500) (1,518,500) (1,369,500) 115,000 34,000 149,000 Expense 1,513,188 1,513,188 1,513,188 0 0 0 Net (5,312) (5,312) 143,688 115,000 34,000 149,000 Justification: $149,000 Revenue Decrease

This financial year has seen a notable reduction in burials. Similar experience is being noted with other Councils. Fall in the death rate has also been noted and investigated by private operators who researched and came to the conclusion that the death rate in Australia reduced due to a low impact influenza season. Our impact is exacerbated as there was an “over above” increase in revenue growth assessment this financial year due to a spiked increase in the previous year (2018) following newspaper reports of potential grave shortages in the City cemeteries. The reduction proposed in this budget review sees the revenue estimate aligned to 2017 figures, prior to the spike (2018) and to the increased growth estimate of the current year.

Recurrent decrease $115,000: Cemetery Fees - Plaques - $50,000 Cemetery Fees - Plots - $65,000

Non-recurrent decrease $34,000: Cemetery Fees - Plaques - $10,000 Cemetery Fees - Plots - $24,000

PB_019 Budget Review - Detail City of Gold Coast-IN-CONFIDENCE Page : 61 of 190 About this Report Attachment 1 Page 208

PB_019 Budget Review - Detail for FY 2018 - 2019

Budget Centre Element Type 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 Initial Budget Revised Budget Proposed Budget March Review March Review March Review Recurrent Non-Recurrent Total Movement Movement Movement Lifestyle & Community

CS4670O001 - GCBCG - Administration Revenue 0 0 0 0 0 0 Expense 311,390 311,390 238,890 0 (72,500) (72,500) Net 311,390 311,390 238,890 0 (72,500) (72,500) Justification: ($72,500) Expenditure Decrease

Gold Cost Building Certification Labour savings due to the inability to source a Principal Certifier to a vacant position plus a long term illness within the section, this impacted on resource levels and subsequently the labour budget.

CS4670O003 - Commercial Building Certification Revenue (138,400) (138,400) (90,400) 0 48,000 48,000 Expense 0 0 0 0 0 0 Net (138,400) (138,400) (90,400) 0 48,000 48,000 Justification: $48,000 Revenue Decrease

Commercial Building Certifications. Staff vacancies through an extended period impacted the ability for the section to receive and process applications.

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PB_019 Budget Review - Detail for FY 2018 - 2019

Budget Centre Element Type 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 Initial Budget Revised Budget Proposed Budget March Review March Review March Review Recurrent Non-Recurrent Total Movement Movement Movement Lifestyle & Community

CS4670O005 - Building Cert - Ext Training Overhead Revenue 0 0 0 0 0 0 Expense 16,300 16,300 7,300 0 (9,000) (9,000) Net 16,300 16,300 7,300 0 (9,000) (9,000) Justification: ($9,000) Expenditure Decrease

Due to the retirement and long term illness the scheduling of training required by certifiers to retain professional points and retain licences was not required. Limited training is now scheduled for the remainder of the financial year.

CS4770C001 - Major Sporting Facilities Revenue 0 0 0 0 0 0 Expense 945,731 2,460,299 2,789,299 0 329,000 329,000 Net 945,731 2,460,299 2,789,299 0 329,000 329,000 Justification: $329,000 Expenditure Increase

Budget increase funded as a transfer from the Office of the Chief Executive Officer CE8260O001 City Projects for legacy co-funded projects post Commonwealth Games.

Project 31962 - Gold Coast Sport And Leisure Centre - Log Barrier Elite Field $110,000 Project 31714 - Gold Coast Sport and Leisure Centre - Security Upgrade Project $151,000 Project 32037 - Coomera Indoor Sports Centre Cash Handling A A Offender $68,000

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PB_019 Budget Review - Detail for FY 2018 - 2019

Budget Centre Element Type 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 Initial Budget Revised Budget Proposed Budget March Review March Review March Review Recurrent Non-Recurrent Total Movement Movement Movement Lifestyle & Community

CS4770O004 - Runaway Bay Indoor Stadium Revenue (440,100) (440,100) (315,940) 0 124,160 124,160 Expense 504,207 504,207 464,797 0 (39,410) (39,410) Net 64,107 64,107 148,857 0 84,750 84,750 Justification: $124,160 Revenue Decrease ($39,410) Expenditure Decrease

Revenue Decrease $124,160 Revenue forecast for Runaway Bay Indoor Stadium will not meet budget. Actual revenue is expected to be lower than forecasted after 4 week closure of Christmas/New Year, a quieter than expected February and upcoming closure for 8 weeks due to kiosk refurbishment , which was previously expected to be a shorter window of closure and continued reduced trade. A vending machine is now to be implemented (to reduce the impact of labour costs) during the kiosk refurbishment.

Expenditure Decrease ($39,140) Over budgeted electricity based on actualised costs year to date decreased by ($20,000). Savings across cleaning supplies, waste collection and other expenses of ($19,410).

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PB_019 Budget Review - Detail for FY 2018 - 2019

Budget Centre Element Type 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 Initial Budget Revised Budget Proposed Budget March Review March Review March Review Recurrent Non-Recurrent Total Movement Movement Movement Lifestyle & Community

CS4770O005 - Existing Carrara Indoor Stadium Operatns Revenue (271,000) (271,000) (342,000) 0 (71,000) (71,000) Expense 447,419 447,419 500,029 0 52,610 52,610 Net 176,419 176,419 158,029 0 (18,390) (18,390) Justification: ($71,000) Revenue Increase $52,610 Expenditure Increase

Revenue Increase ($71,000) Higher than expected demand for events to be held at Carrara Indoor Sport Stadium resulting in additional events ($52,500) and catering revenue ($18,500) as a result of increased venue patronage.

Expenditure Increase $52,610 Additional costs associated with higher usage of the venue such as maintenance $20,000, water rates $3,000, security & protective services $5,000, IT services $4,000 and casual labour costs $20,610.

CS4770O006 - Carrara Outdoor Stadium Operations Revenue (225,600) (225,600) (162,200) 0 63,400 63,400 Expense 611,080 904,060 904,060 0 0 0 Net 385,480 678,460 741,860 0 63,400 63,400 Justification: $63,400 Revenue Decrease Lower than expected revenue for the Outdoor precinct partly due to the accommodation of the "Over Thirty Five" sporting group who were displaced from their normal grounds by the Commonwealth Games and estimated loss of revenue from two months delay on elite field repairs.

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PB_019 Budget Review - Detail for FY 2018 - 2019

Budget Centre Element Type 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 Initial Budget Revised Budget Proposed Budget March Review March Review March Review Recurrent Non-Recurrent Total Movement Movement Movement Lifestyle & Community

CS4770O019 - Coomera Indoor Sports Centre Revenue (1,212,844) (1,212,844) (1,212,844) 0 0 0 Expense 1,390,608 1,538,394 1,518,394 0 (20,000) (20,000) Net 177,764 325,550 305,550 0 (20,000) (20,000) Justification: ($20,000) Expenditure decrease

($50,000) reduction in food and beverage costs achieved through business efficiencies, including review of supply contracts for food and beverage which has realised better pricing for food and beverage supplies. Offsetting this IT and telecommunications costs, including additional software licence costs, are $30,000 greater than originally forecast.

CS4770O020 - Gold Coast Sports & Leisure Centre Revenue (2,782,594) (2,876,404) (2,906,634) 0 (30,230) (30,230) Expense 3,118,399 3,173,958 3,634,448 0 460,490 460,490 Net 335,805 297,554 727,814 0 430,260 430,260 Justification: ($30,230) Revenue Increase $460,490 Expenditure Increase

Revenue Decrease $127,960 Revenue forecast for Gold Coast Sport and Leisure Centre will not meet budget due to limited event business throughout December and the last week of January. These months, as well as February are also traditionally quieter periods for regular hirers and locational customers (e.g. SUNS staff and AFL Qld) reducing food and beverage sales. With no comparable historical, data it was previously assumed January and February would see business levels return to those similar to the first half of the financial year, however this did not occur.

Expenditure Increase $354,300 Due to the stop-start nature of operating the Gold Coast Sports and Leisure Centre in the immediate pre and post Commonwealth Games 2018 environment where historical costs and trends have been limited it has been difficult to gauge peaks and troughs to accurately forecast venue usage and therefore maintenance, security and labour requirements. During the current financial year, operations are beginning to normalise increasing the level of confidence in budget forecasts and requirements. Year to date security labour costs are $75,000 more than originally estimated due the impact of unforeseen additional requirements to provide opening and early morning coverage (6am through to 10pm) up until November 2018. Since November security labour has been reduced between the hours of 10am and 4pm offsetting security hours at the start of the day with costs for the remainder of the financial year now aligningPB_019 withBudget original Review security - Detail budget forecasts. City of Gold Coast-IN-CONFIDENCE Page : 66 of 190 Additional unbudgeted costs of $129,300, include: About this Report • IT and telecommunication costs including On the Net event services and ATI micro link support - $25,000 • Events based fleet and plant hire costs, including hydraulic lifts - $15,000 and higher than budgeted costs associated with servicing and maintenance of air conditioning outside of defects and liability period - $12,000 and building and energy management system - $10,800 • Internal waste collection charges - $15,000, chemicals and gases - $18,000, security and protective services, including fire maintenance - $15,000 • Preparation of lease plans, forklift operator costs and technical crews and alarm management - $18,500 Total $204,300

Re-forecasting of annual food and beverage cost of sales and casual labour hours based on actuals to date now that operations (community usage and events) have begun to normalise. $115,000 increase in annual food and beverage cost of sales, $35,000 increase in casual labour costs. Review of supplier contracts when due for renewal and improvements to stock management procedures and software are expected to provide efficiencies in the new financial year. Total $150,000

Expenditure Decrease ($52,000) Saving in electricity costs expected ($30,000) Saving in cleaning costs with the conversion from agency hire to contract cleaners ($22,000)

($158,190) Revenue Increase $158,190 Expenditure Increase Funding recognition from Department of Innovation, Tourism Industry Development Office of the Commonwealth Games. The funding contribution is to repair remedial works to the flooring at Gold Coast Sports and Leisure Centre. Works expected to be completed and invoiced by late May or early June 2019. Attachment 1 Page 213 ($30,230) Revenue Increase $460,490 Expenditure Increase

Revenue Decrease $127,960 PB_019Revenue forecast Budget for Gold Coast Review Sport and Leisure - Detail Centre willfor not FYmeet budget2018 due - to2019 limited event business throughout December and the last week of January. These months, as well as February are also traditionally quieter periods for regular hirers and locational customers (e.g. SUNS staff and AFL Qld) reducing food and beverage sales. With no comparable historical, data it was previously assumed January and February would see business levels return to those similar to the first half of the financial year, however this didBudget not occur. Centre Element Type 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 Initial Budget Revised Budget Proposed Budget March Review March Review March Review Expenditure Increase $354,300 Recurrent Non-Recurrent Total Movement Due to the stop-start nature of operating the Gold Coast Sports and Leisure Centre in the immediate pre and post Commonwealth GamesMovement 2018 environment whereMovement historical costs and trends have been limited it has been difficult to gauge peaks and troughs to accurately forecast venue usage and therefore maintenance, security and labour requirements. During the Lifestylecurrent financial & Community year, operations are beginning to normalise increasing the level of confidence in budget forecasts and requirements. Year to date security labour costs are $75,000 more thanJustification: originally estimated due the impact of unforeseen additional requirements to provide opening and early morning coverage (6am through to 10pm) up until November 2018. Since November security labour has been reduced between the hours of 10am and 4pm offsetting security hours at the start of the day with costs for the remainder of the financial year now aligning with original security budget forecasts. Additional unbudgeted costs of $129,300, include: • IT and telecommunication costs including On the Net event services and ATI micro link support - $25,000 • Events based fleet and plant hire costs, including hydraulic lifts - $15,000 and higher than budgeted costs associated with servicing and maintenance of air conditioning outside of defects and liability period - $12,000 and building and energy management system - $10,800 • Internal waste collection charges - $15,000, chemicals and gases - $18,000, security and protective services, including fire maintenance - $15,000 • Preparation of lease plans, forklift operator costs and technical crews and alarm management - $18,500 Total $204,300

Re-forecasting of annual food and beverage cost of sales and casual labour hours based on actuals to date now that operations (community usage and events) have begun to normalise. $115,000 increase in annual food and beverage cost of sales, $35,000 increase in casual labour costs. Review of supplier contracts when due for renewal and improvements to stock management procedures and software are expected to provide efficiencies in the new financial year. Total $150,000

Expenditure Decrease ($52,000) Saving in electricity costs expected ($30,000) Saving in cleaning costs with the conversion from agency hire to contract cleaners ($22,000)

($158,190) Revenue Increase $158,190 Expenditure Increase Funding recognition from Department of Innovation, Tourism Industry Development Office of the Commonwealth Games. The funding contribution is to repair remedial works to the flooring at Gold Coast Sports and Leisure Centre. Works expected to be completed and invoiced by late May or early June 2019.

CS4820C001 - Entomology - Capital Revenue 0 0 0 0 0 0 Expense 20,705 20,705 270,705 0 250,000 250,000 Net 20,705 20,705 270,705 0 250,000 250,000

PB_019 Budget Review - Detail City of Gold Coast-IN-CONFIDENCE Page : 67 of 190 About this Report Attachment 1 Page 214

PB_019 Budget Review - Detail for FY 2018 - 2019

Budget Centre Element Type 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 Initial Budget Revised Budget Proposed Budget March Review March Review March Review Recurrent Non-Recurrent Total Movement Movement Movement Lifestyle & Community Justification: $250,000 Expenditure Increase

Update from outdated Access 2003 database to manage service requests, work flows, mosquito sampling, surveillance and treatment data. New system will provide flexibility and mobile device support. The system generates property based (GIS) and mobile platform based (currently paper based) work flows.

Following the investigation of possible options for replacement of the GCVCP database, two viable options were identified that have the potential to provide the workflows and mapping support required by the Pest Management Unit (PMU) for Vector Control: • FieldSeeker GIS for Mosquito Control by Frontier Precision • Custom built solution on Microsoft Dynamics proposed by Fujitsu

Frontier Precision Proposal Demonstrations of the product have shown an excellent fit between the business processes followed by the PMU and the functionality provided by the system.

Fujitsu Proposal The Fujitsu Proposal includes a 4 week requirements confirmation and design. The solution will be custom built to suit the needs of the PMU. The build will effectively leverage / extend the base functionality of Dynamics. Exactly how this will work will not be fully known until the implementation.

Usability Both systems will provide a management / administration interface as well as a mobile mapping interface for field workers. The Frontier Precision solution approaches configuration at a technical level at certain points, e.g. requiring configuration files to be updated, particularly for the mobile application. Support for these components can be provided by Fujitsu if required at a cost.

Neither solution should present an issue with the City’s sourcing strategy. The Fujitsu solution would be procured through the arrangements in place as part of the Managed Services contract. The Frontier solution would be procured through the standard process.

PB_019 Budget Review - Detail City of Gold Coast-IN-CONFIDENCE Page : 68 of 190 About this Report Attachment 1 Page 215

PB_019 Budget Review - Detail for FY 2018 - 2019

Budget Centre Element Type 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 Initial Budget Revised Budget Proposed Budget March Review March Review March Review Recurrent Non-Recurrent Total Movement Movement Movement Lifestyle & Community

CS4820O001 - Pest Control Revenue (25,440) (25,440) (25,440) 0 0 0 Expense 4,440,350 4,440,350 4,190,350 0 (250,000) (250,000) Net 4,414,910 4,414,910 4,164,910 0 (250,000) (250,000) Justification: ($250,000) Expenditure Decrease

($150,000) Labour savings. Savings as a result of labour due to extended Long Service Leave ($100,000) Savings due to only 5 Aerial Treatment programs for this year instead of seven. Seven (7) treatments were budgeted for given the number and height of the predicted tides.

CS4910O001 - OFF Street Carpark Revenue 0 (70,000) (70,000) 0 0 0 Expense 71,120 141,120 161,120 0 20,000 20,000 Net 71,120 71,120 91,120 0 20,000 20,000 Justification: $20,000 Expenditure Increase

The setup and establishment of the Jubilee Off Street Car Park in Broadbeach was more that was estimated. Whilst not overspent, it is likely additional funds will be required to operate the open venue for the next few months. Unexpected costs related to security and communications to ensure the car park is safer and that all security areas can be monitored via our security base area (the car park is open 24hrs per day).

Total for Directorate: Lifestyle & Community

PB_019 Budget Review - Detail City of Gold Coast-IN-CONFIDENCE Page : 69 of 190 About this Report Attachment 1 Page 216

PB_019 Budget Review - Detail for FY 2018 - 2019

Budget Centre Element Type 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 Initial Budget Revised Budget Proposed Budget March Review March Review March Review Recurrent Non-Recurrent Total Movement Movement Movement Lifestyle & Community Revenue (116,733,594) (124,987,464) (122,272,615) (406,170) 3,121,019 2,714,849 Expense 310,291,708 335,165,808 331,757,917 113,210 (3,521,101) (3,407,891) Net 193,558,114 210,178,344 209,485,302 (292,960) (400,082) (693,042)

PB_019 Budget Review - Detail City of Gold Coast-IN-CONFIDENCE Page : 70 of 190 About this Report Attachment 1 Page 217

PB_019 Budget Review - Detail for FY 2018 - 2019

Budget Centre Element Type 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 Initial Budget Revised Budget Proposed Budget March Review March Review March Review Recurrent Non-Recurrent Total Movement Movement Movement Office of the CEO

CE8100O001 - Internal Communication Revenue 0 0 0 0 0 0 Expense 35,500 35,500 25,500 0 (10,000) (10,000) Net 35,500 35,500 25,500 0 (10,000) (10,000) Justification: $10,000 Expenditure Reduction.

General Review:

$10,000 Expense budget reduced as the anticipated expenditure is less than the budget for the year.

CE8100O002 - Regional Collaboration Revenue 0 0 0 0 0 0 Expense 8,000 8,000 2,000 0 (6,000) (6,000) Net 8,000 8,000 2,000 0 (6,000) (6,000) Justification: $6,000 Expenditure Reduction.

General Review:

$6,000 non-recurrent savings from Regional Collaboration budget as the budget is not required for the rest of 2018-19.

PB_019 Budget Review - Detail City of Gold Coast-IN-CONFIDENCE Page : 71 of 190 About this Report Attachment 1 Page 218

PB_019 Budget Review - Detail for FY 2018 - 2019

Budget Centre Element Type 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 Initial Budget Revised Budget Proposed Budget March Review March Review March Review Recurrent Non-Recurrent Total Movement Movement Movement Office of the CEO

CE8100O006 - Executive Services Administrative Costs Revenue 0 0 0 0 0 0 Expense 62,800 146,800 149,950 0 3,150 3,150 Net 62,800 146,800 149,950 0 3,150 3,150 Justification: $3,150 Expenditure Reduction

General Review:

$8,000 expense budget requested to cover the legal advice costs. The advice relates to a complex competitive neutrality complaint. This additional budget increase will be offset by the savings offered within the branch,

$4,850 expense budget is requested to be reduced non-recurrently as the forecast expenditure is less than the budget for the year.

CE8100O011 - External Training Overhead Revenue 0 0 0 0 0 0 Expense 14,800 14,800 10,800 0 (4,000) (4,000) Net 14,800 14,800 10,800 0 (4,000) (4,000) Justification: $4,000 Expenditure Reduction.

General Review:

$4,000 Expense budget reduced as the anticipated expenditure is less than the budget for the year.

PB_019 Budget Review - Detail City of Gold Coast-IN-CONFIDENCE Page : 72 of 190 About this Report Attachment 1 Page 219

PB_019 Budget Review - Detail for FY 2018 - 2019

Budget Centre Element Type 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 Initial Budget Revised Budget Proposed Budget March Review March Review March Review Recurrent Non-Recurrent Total Movement Movement Movement Office of the CEO

CE8100O015 - Conduct and Performance of Councillors Revenue 0 0 (1,250) 0 (1,250) (1,250) Expense 3,500 3,500 53,500 0 50,000 50,000 Net 3,500 3,500 52,250 0 48,750 48,750 Justification: $50,000 Expenditure Increase. $1,250 Revenue Increase

General Review:

$50,000 additional funding is requested to fund the cost arising from investigation of the conduct and the performance of Councillors. As per the new Local Government Legislation changes, the conduct and performance of Councillors can be challenged and the cost of conducting investigation is expected to be increased and the existing budget of $3,500 is not sufficient to meet the increased cost.

$1,250 revenue budget increase is requested to recognise the cost recovered from the councillors as a result of the decision of the Tribunal.

PB_019 Budget Review - Detail City of Gold Coast-IN-CONFIDENCE Page : 73 of 190 About this Report Attachment 1 Page 220

PB_019 Budget Review - Detail for FY 2018 - 2019

Budget Centre Element Type 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 Initial Budget Revised Budget Proposed Budget March Review March Review March Review Recurrent Non-Recurrent Total Movement Movement Movement Office of the CEO

CE8100O017 - Energy and Water Ombudsman Revenue 0 (11,829) (11,829) 0 0 0 Expense 90,000 90,000 65,000 0 (25,000) (25,000) Net 90,000 78,171 53,171 0 (25,000) (25,000) Justification: $25,000 Expenditure Reduction

General Review:

$25,000 Expense budget reduced as the anticipated expenditure is less than the budget for the year.

PB_019 Budget Review - Detail City of Gold Coast-IN-CONFIDENCE Page : 74 of 190 About this Report Attachment 1 Page 221

PB_019 Budget Review - Detail for FY 2018 - 2019

Budget Centre Element Type 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 Initial Budget Revised Budget Proposed Budget March Review March Review March Review Recurrent Non-Recurrent Total Movement Movement Movement Office of the CEO

CE8100O018 - Staff Parking at Evandale / Bundall Revenue (324,200) (324,200) (424,200) 0 (100,000) (100,000) Expense 324,200 324,200 199,200 0 (125,000) (125,000) Net 0 0 (225,000) 0 (225,000) (225,000) Justification: $125,000 Expenditure Reduction. $100,000 Revenue Increase.

General Review:

$125,000 non-recurrent expenditure savings identified in 2018-19 on Shuttle bus to Racecourse as the forecast expenditure is less than the budget for the year.

$100,000 Non-recurrent increase to Staff Car Parking Revenue.

The initial revenue budget for 2018-19 was set lower in the anticipation of that the number of Staff Car Parking spaces will be reduced with the changes to the Evandale site. The actual revenue to end of March has exceeded the budget, therefore it’s requested to increase the annual revenue by $100,000.

PB_019 Budget Review - Detail City of Gold Coast-IN-CONFIDENCE Page : 75 of 190 About this Report Attachment 1 Page 222

PB_019 Budget Review - Detail for FY 2018 - 2019

Budget Centre Element Type 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 Initial Budget Revised Budget Proposed Budget March Review March Review March Review Recurrent Non-Recurrent Total Movement Movement Movement Office of the CEO

CE8100O019 - Commercial Advertising Revenue (21,600) (21,600) (11,600) 0 10,000 10,000 Expense 20,000 20,000 5,000 0 (15,000) (15,000) Net (1,600) (1,600) (6,600) 0 (5,000) (5,000) Justification: $15,000 Expenditure Reduction $10,000 Revenue Reduction

General Review:

$15,000 Expenditure Reduction

Procurement activities for commercial advertising on Council Land and Facilities Project were finalised in the 2017-18 financial year. $5,000 is being retained for any future contract variations required for Bin Advertising or Billboards, therefore $15,000 Expense budget is requested to be reduced.

$10,000 Revenue Reduction

$10000 Revenue budget is requested to be reduced. Only bin advertising devices have been implemented since contract commencement. Not all bin locations could be fulfilled because of changes to the precinct area bin locations. As such, bin advertising revenues are only operating at approximately 50% of the previously anticipated capacity. Alternate solutions are currently being explored to address identified issues.

PB_019 Budget Review - Detail City of Gold Coast-IN-CONFIDENCE Page : 76 of 190 About this Report Attachment 1 Page 223

PB_019 Budget Review - Detail for FY 2018 - 2019

Budget Centre Element Type 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 Initial Budget Revised Budget Proposed Budget March Review March Review March Review Recurrent Non-Recurrent Total Movement Movement Movement Office of the CEO

CE8100O022 - Major Events GC Ltd Revenue 0 0 0 0 0 0 Expense 0 1,000 21,000 0 20,000 20,000 Net 0 1,000 21,000 0 20,000 20,000 Justification: $20,000 Expenditure Increase

General review

$20,000 is requested to fund the legal costs associated with setting up a new council controlled entity in relation to corporate structure, taxation consideration and employment matters. This budget also will be used to pay for the preparation of the constitution for the new entity.

CE8110C001 - Vehicle - Auction / Sale Proceeds Revenue 0 0 (105,781) 0 (105,781) (105,781) Expense 0 0 0 0 0 0 Net 0 0 (105,781) 0 (105,781) (105,781) Justification: $105,781 Revenue Increase

General review:

$105,781 transferred from Fleet to The Bank as result of sale of Trailers and one motor vehicle, which will not be requested to be replaced. The offset of this revenue is included in the BC: CE8110O001.

PB_019 Budget Review - Detail City of Gold Coast-IN-CONFIDENCE Page : 77 of 190 About this Report Attachment 1 Page 224

PB_019 Budget Review - Detail for FY 2018 - 2019

Budget Centre Element Type 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 Initial Budget Revised Budget Proposed Budget March Review March Review March Review Recurrent Non-Recurrent Total Movement Movement Movement Office of the CEO

CE8110O001 - Executive Administration Revenue 0 0 0 0 0 0 Expense 18,010 18,010 123,791 0 105,781 105,781 Net 18,010 18,010 123,791 0 105,781 105,781 Justification: $105,781 Expenditure Increase.

General Review:

$105,781 savings made from the sale of fleet items are transferred to the CEO's Bank and will be determined where this savings will be applied or given up as part of the budget review or savings may be used in a future date.

CE8180O001 - Separation Costs from Allconnex Revenue 0 0 0 0 0 0 Expense 600,000 600,000 400,000 0 (200,000) (200,000) Net 600,000 600,000 400,000 0 (200,000) (200,000) Justification: $200,000 Expenditure Reduction.

General Review:

The lease of the Rocket building ceased on the 20 March 2019, and the budget for 2018-19 was set to cover the lease cost, electricity and the costs associated with the relocation and the storage of the remaining furniture and equipment. It’s anticipated that the expenditure will be lower than the budget and therefore $200,000 is requested to be reduced from the expense budget.

PB_019 Budget Review - Detail City of Gold Coast-IN-CONFIDENCE Page : 78 of 190 About this Report Attachment 1 Page 225

PB_019 Budget Review - Detail for FY 2018 - 2019

Budget Centre Element Type 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 Initial Budget Revised Budget Proposed Budget March Review March Review March Review Recurrent Non-Recurrent Total Movement Movement Movement Office of the CEO

CE8210C001 - Gold Coast Arts Centre - Capital Revenue 0 0 0 0 0 0 Expense 1,445,609 1,584,516 1,651,667 0 67,151 67,151 Net 1,445,609 1,584,516 1,651,667 0 67,151 67,151 Justification: $67,151 Expenditure increase

Intra-directorate Transfer:

$67,151 transferred from BC:CE8210O001 CC1007679 to Project 65041 as the budget was allocated in Operating budget instead of Capital budget.

CE8210O003 - GCAC - Maintenance Revenue 0 0 0 0 0 0 Expense 200,000 200,000 132,849 0 (67,151) (67,151) Net 200,000 200,000 132,849 0 (67,151) (67,151) Justification: $67,151 Expenditure Reduction

Intra-directorate Transfer:

$67,151 transferred from BC:CE8210O001 CC1007679 to BC: CE8210C001 Project 65041 as the budget was allocated in Operating budget instead of Capital budget.

PB_019 Budget Review - Detail City of Gold Coast-IN-CONFIDENCE Page : 79 of 190 About this Report Attachment 1 Page 226

PB_019 Budget Review - Detail for FY 2018 - 2019

Budget Centre Element Type 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 Initial Budget Revised Budget Proposed Budget March Review March Review March Review Recurrent Non-Recurrent Total Movement Movement Movement Office of the CEO

CE8230O001 - Annual Community Grants Revenue 0 0 0 0 0 0 Expense 754,000 754,000 749,000 0 (5,000) (5,000) Net 754,000 754,000 749,000 0 (5,000) (5,000) Justification: General Review:

$5,000 transferred from Community Grants Program to Mayor’s Concert budget in Mayoral Support BC: CG640O001 CC1008449 as per Council Resolution G18.1113.022.

PB_019 Budget Review - Detail City of Gold Coast-IN-CONFIDENCE Page : 80 of 190 About this Report Attachment 1 Page 227

PB_019 Budget Review - Detail for FY 2018 - 2019

Budget Centre Element Type 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 Initial Budget Revised Budget Proposed Budget March Review March Review March Review Recurrent Non-Recurrent Total Movement Movement Movement Office of the CEO

CE8240C002 - Energy Generation Infrastructure Revenue (3,423,130) (4,786,729) (4,846,729) 0 (60,000) (60,000) Expense 3,396,130 7,046,704 7,806,704 0 760,000 760,000 Net (27,000) 2,259,975 2,959,975 0 700,000 700,000 Justification: $760,000 Expenditure Increase $60,000 Revenue Increase

General Review:

Energy Gen Infrastructure Comm Venues (Project 60026) - $60,000 Expense & Revenue Increase

Additional funding of $60,000 is requested to fund the greater opportunities for efficiencies gains and to take advantage of advancements in energy technologies. It is also required to fund projects where further investigation is required to meet legislatives. This additional expense budget will be funded by Investment Fund Reserve $54,000 and Government Grants & Subsidies- Federal Government $6,000.

Intra-Directorate Transfer

GC Indoor Sports Complex Carrara for solar installation (Project 60086) $700,000.

The above project is one of the five GC2018 legacy projects agreed by the Queensland Government to fund. These projects are intended to be funded from the savings from both parties and with some recurrent funding support from City existing budgets.

$700,000 is requested to fund the installation of additional solar panels and battery storage reducing energy costs. Payback period on investment is approximately 4.5 years.

PB_019 Budget Review - Detail City of Gold Coast-IN-CONFIDENCE Page : 81 of 190 About this Report Attachment 1 Page 228

PB_019 Budget Review - Detail for FY 2018 - 2019

Budget Centre Element Type 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 Initial Budget Revised Budget Proposed Budget March Review March Review March Review Recurrent Non-Recurrent Total Movement Movement Movement Office of the CEO

CE8240O001 - Energy Management Unit Revenue 0 0 0 0 0 0 Expense 546,720 853,047 943,047 0 90,000 90,000 Net 546,720 853,047 943,047 0 90,000 90,000 Justification: $90,000 Expenditure increase

General review:

An additional $90,000 is requested to fund consultancy charges for Renewable Technology on the City's dormant Landfills as this charge was higher than anticipated due to the complexity of the City’s landfills. Dormant landfills are often located in large parcels of land which are under-utilised for more than 25 years requiring ongoing maintenance and management to meet the stringent environmental standards. This consultancy will identify the un-tapped opportunities for renewable technology using these assets including but not limited to type of technology, constraints, benefits and legislatives requirements to support the Energy Management Program's (EMP) objective of reducing the cost of electricity and providing long term benefits to the community.

The EMP has engaged EPC Technologies to undertake a detailed study that may result in large scale renewable energy generation and energy storage systems opportunities across three locations including Molendinar, Suntown and Tugun dormant landfills. This type of work has not been undertaken previously.

CE8260O001 - City Projects - OCEO Revenue 0 0 0 0 0 0 Expense 0 6,464,092 5,352,710 0 (1,111,382) (1,111,382) Net 0 6,464,092 5,352,710 0 (1,111,382) (1,111,382) Justification: $1,111,382 Expenditure Reduction

General Review:

Griffith University Research Funding - $750,000 Expenditure Increase

InPB_019 March Budget 2018 CouncilReview - approvedDetail funding of $750,000 (Council Resolution G18.0313.017 & EPE18.0307.010)City of Gold Coast-IN-CONFIDENCE towards a research partnership between the Institute of Glycomics (IoG) andPage : 82 of 190 the Fraunhofer Institute. The funding was intended to be provided in two equal instalments of $375,000 in 2017-18 and 2018-19. No funding milestones could be met in 2017-18 yearAbout as this Report the project was in its infancy as such unutilised funds from Investment Attraction Program (IAP) allocation for that year were declared as savings. The project has advanced over the past 12 months and the project is likely to meet all its milestones in the coming months. Council at its meeting of 12 February 2019 approved changes to the original funding agreement milestones. As such a new funding agreement is being drafted to reflect these changes. Funding payment criteria for all milestones are likely to meet by IoG in mid-2019, as such it is necessary for the City to meet its funding commitment by end of 2018-19 financial year.

GC 2018 Legacy Projects - $1,861,382 Expenditure reduction.

Inter-directorate Transfer: $1,096,500 Intra-Directorate Transfer: $764,882 Budget transferred as per iSpot # 7288316. $927,000 transferred to other projects from City savings & $869,500 from State savings and the balance of $307,500 transferred to State contribution refund.

The details of the Transfer of $1,796,500 are below:

1. Gold Coast Sports Precinct - Gold Coast Sports and Leisure centre Carrara - $961,000 (50:50 City savings and State)

- Energy Management Unit - $700,000 for installation of additional solar panels and battery storage reducing energy costs BC:CE8240C002 Project 60086 - Venues - L&C $110,000 for Nerang River perimeter fence requires major renovation BC:CS4770C001 Project 31962 - Venues Security Upgrade - $151,000 BC: BC:CS4770C001, Project 31714.

2. Gold Coast Hockey Centre - new entry sign. - 30,000 (50:50 - City savings and State) BC: CS4150C005 Project 32091.

3. Gold Coast Aquatic Centre - Shade Structures - 360,000 ($360,000 50:50 - City savings and State $200,000 Revenue funding).

- Installation of large shade structure to the upper western pool deck and a smaller shade structure to the learn to swim pool - To upper pool deck structure $500,000 BC: CS4450C002 Project 31762. - Installation of large shade structure to the upper western pool deck and a smaller shade structure to the learn to swim pool - $60,000 BC: CS4450C002 Project 31762.

4. Gold Coast Health and Knowledge Precinct - $170,000 (50:50 City savings and State)

- Pedestrian link Musgrave Park to Parklands CBD to provide surrounding residents with more direct pedestrian link to retail activities in the Parkland’s Precinct and the light rail station - $70,000 BC: CS4150C005 Project 32089. - Parklands Precinct regional park heavy vehicle access road to support events, activation activities and maintenance Heavy vehicle access road - $100,000 BC: CS4150C005 Project 32090.

5. Coomera Sports Precinct - field and building Security Upgrades - $218,000 (50:50 City savings and State)

- Coomera AFL and Coomera Touch - field perimeter fencing required to prevent access on to playing surface due to reconfiguration of the Coomera Indoor Stadium car park - $80,000 BC:CS4150C005 Project 32104. - Coomera Rugby Union field and sideline re-profile to enhance drainage as a consequence of level changes caused by the construction of the Coomera Indoor Stadium - $70,000 BC: CS4150C005 Project 32105. - Coomera Indoor stadium security upgrades - $68,000 BC: CS4770C001 Project 32037.

6. Sports Accord 2019 - Bespoke Sports Accord Program leveraging off the GC2018 and the Trade 2018 activities - $57,500 (100% City savings) BC: PE5370O001 CC 1006417.

Intra-Directorate Transfer:

$64,882 Expenditure reduction

$64,882 transferred from Legacy contingency (CC 1007415) to 55233-9740 (ED5670O002) in relation to late invoices received for media advertising for the Games from Zenith. Attachment 1 Page 229

PB_019 Budget Review - Detail for FY 2018 - 2019

Budget Centre Element Type 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 Initial Budget Revised Budget Proposed Budget March Review March Review March Review $1,111,382 Expenditure Reduction Recurrent Non-Recurrent Total Movement Movement Movement OfficeGeneral Review:of the CEO GriffithJustification: University Research Funding - $750,000 Expenditure Increase

In March 2018 Council approved funding of $750,000 (Council Resolution G18.0313.017 & EPE18.0307.010) towards a research partnership between the Institute of Glycomics (IoG) and the Fraunhofer Institute. The funding was intended to be provided in two equal instalments of $375,000 in 2017-18 and 2018-19. No funding milestones could be met in 2017-18 year as the project was in its infancy as such unutilised funds from Investment Attraction Program (IAP) allocation for that year were declared as savings. The project has advanced over the past 12 months and the project is likely to meet all its milestones in the coming months. Council at its meeting of 12 February 2019 approved changes to the original funding agreement milestones. As such a new funding agreement is being drafted to reflect these changes. Funding payment criteria for all milestones are likely to meet by IoG in mid-2019, as such it is necessary for the City to meet its funding commitment by end of 2018-19 financial year.

GC 2018 Legacy Projects - $1,861,382 Expenditure reduction.

Inter-directorate Transfer: $1,096,500 Intra-Directorate Transfer: $764,882 Budget transferred as per iSpot # 7288316. $927,000 transferred to other projects from City savings & $869,500 from State savings and the balance of $307,500 transferred to State contribution refund.

The details of the Transfer of $1,796,500 are below:

1. Gold Coast Sports Precinct - Gold Coast Sports and Leisure centre Carrara - $961,000 (50:50 City savings and State)

- Energy Management Unit - $700,000 for installation of additional solar panels and battery storage reducing energy costs BC:CE8240C002 Project 60086 - Venues - L&C $110,000 for Nerang River perimeter fence requires major renovation BC:CS4770C001 Project 31962 - Venues Security Upgrade - $151,000 BC: BC:CS4770C001, Project 31714.

2. Gold Coast Hockey Centre - new entry sign. - 30,000 (50:50 - City savings and State) BC: CS4150C005 Project 32091.

3. Gold Coast Aquatic Centre - Shade Structures - 360,000 ($360,000 50:50 - City savings and State $200,000 Revenue funding).

- Installation of large shade structure to the upper western pool deck and a smaller shade structure to the learn to swim pool - To upper pool deck structure $500,000 BC: CS4450C002 Project 31762. - Installation of large shade structure to the upper western pool deck and a smaller shade structure to the learn to swim pool - $60,000 BC: CS4450C002 Project 31762.

4. Gold Coast Health and Knowledge Precinct - $170,000 (50:50 City savings and State)

- PB_019Pedestrian Budget link Review Musgrave - Detail Park to Parklands CBD to provide surrounding residents with more directCity of pedestrianGold Coast-IN-CONFIDENCE link to retail activities in the Parkland’s Precinct and the light rail station Page- : 83 of 190 $70,000 BC: CS4150C005 Project 32089. About this Report - Parklands Precinct regional park heavy vehicle access road to support events, activation activities and maintenance Heavy vehicle access road - $100,000 BC: CS4150C005 Project 32090.

5. Coomera Sports Precinct - field and building Security Upgrades - $218,000 (50:50 City savings and State)

- Coomera AFL and Coomera Touch - field perimeter fencing required to prevent access on to playing surface due to reconfiguration of the Coomera Indoor Stadium car park - $80,000 BC:CS4150C005 Project 32104. - Coomera Rugby Union field and sideline re-profile to enhance drainage as a consequence of level changes caused by the construction of the Coomera Indoor Stadium - $70,000 BC: CS4150C005 Project 32105. - Coomera Indoor stadium security upgrades - $68,000 BC: CS4770C001 Project 32037.

6. Sports Accord 2019 - Bespoke Sports Accord Program leveraging off the GC2018 and the Trade 2018 activities - $57,500 (100% City savings) BC: PE5370O001 CC 1006417.

Intra-Directorate Transfer:

$64,882 Expenditure reduction

$64,882 transferred from Legacy contingency (CC 1007415) to 55233-9740 (ED5670O002) in relation to late invoices received for media advertising for the Games from Zenith. $1,111,382 Expenditure Reduction

General Review:

Griffith University Research Funding - $750,000 Expenditure Increase

In March 2018 Council approved funding of $750,000 (Council Resolution G18.0313.017 & EPE18.0307.010) towards a research partnership between the Institute of Glycomics (IoG) and the Fraunhofer Institute. The funding was intended to be provided in two equal instalments of $375,000 in 2017-18 and 2018-19. No funding milestones could be met in 2017-18 year as the project was in its infancy as such unutilised funds from Investment Attraction Program (IAP) allocation for that year were declared as savings. The project has advanced over the past 12 months and the project is likely to meet all its milestones in the coming months. Council at its meeting of 12 February 2019 approved changes to the original funding agreement milestones. As such a new funding agreement is being drafted to reflect these changes. Funding payment criteria for all milestones are likely to meet by IoG in mid-2019, as such it is necessary for the City to meet its funding commitment by end of 2018-19 financial year.

GC 2018 Legacy Projects - $1,861,382 Expenditure reduction.

Inter-directorate Transfer: $1,096,500 Intra-Directorate Transfer: $764,882 Budget transferred as per iSpot # 7288316. $927,000 transferred to other projects from City savings & $869,500 from State savings and the balance of $307,500 transferred to State contribution refund.

The details of the Transfer of $1,796,500 are below:

1. Gold Coast Sports Precinct - Gold Coast Sports and Leisure centre Carrara - $961,000 (50:50 City savings and State) Attachment 1 Page 230 - Energy Management Unit - $700,000 for installation of additional solar panels and battery storage reducing energy costs BC:CE8240C002 Project 60086 - Venues - L&C $110,000 for Nerang River perimeter fence requires major renovation BC:CS4770C001 Project 31962 - Venues Security Upgrade - $151,000 BC: BC:CS4770C001, Project 31714. PB_019 Budget Review - Detail for FY 2018 - 2019 2. Gold Coast Hockey Centre - new entry sign. - 30,000 (50:50 - City savings and State) BC: CS4150C005 Project 32091.

Budget3. Gold CoastCentre AquaticElement Centre Type - Shade Structures - 360,0002018 ($360,000 - 2019 50:50 - City savings2018 - 2019 and State $200,0002018 Revenue - 2019 funding). 2018 - 2019 2018 - 2019 2018 - 2019 Initial Budget Revised Budget Proposed Budget March Review March Review March Review - Installation of large shade structure to the upper western pool deck and a smaller shade structure to the learn to swim pool - To upperRecurrent pool deck structureNon-Recurrent $500,000 BC: CS4450C002Total Movement Project 31762. Movement Movement - Installation of large shade structure to the upper western pool deck and a smaller shade structure to the learn to swim pool - $60,000 BC: CS4450C002 Project 31762. Office of the CEO Justification:4. Gold Coast Health and Knowledge Precinct - $170,000 (50:50 City savings and State)

- Pedestrian link Musgrave Park to Parklands CBD to provide surrounding residents with more direct pedestrian link to retail activities in the Parkland’s Precinct and the light rail station - $70,000 BC: CS4150C005 Project 32089. - Parklands Precinct regional park heavy vehicle access road to support events, activation activities and maintenance Heavy vehicle access road - $100,000 BC: CS4150C005 Project 32090.

5. Coomera Sports Precinct - field and building Security Upgrades - $218,000 (50:50 City savings and State)

- Coomera AFL and Coomera Touch - field perimeter fencing required to prevent access on to playing surface due to reconfiguration of the Coomera Indoor Stadium car park - $80,000 BC:CS4150C005 Project 32104. - Coomera Rugby Union field and sideline re-profile to enhance drainage as a consequence of level changes caused by the construction of the Coomera Indoor Stadium - $70,000 BC: CS4150C005 Project 32105. - Coomera Indoor stadium security upgrades - $68,000 BC: CS4770C001 Project 32037.

6. Sports Accord 2019 - Bespoke Sports Accord Program leveraging off the GC2018 and the Trade 2018 activities - $57,500 (100% City savings) BC: PE5370O001 CC 1006417.

Intra-Directorate Transfer:

$64,882 Expenditure reduction

$64,882 transferred from Legacy contingency (CC 1007415) to 55233-9740 (ED5670O002) in relation to late invoices received for media advertising for the Games from Zenith.

PB_019 Budget Review - Detail City of Gold Coast-IN-CONFIDENCE Page : 84 of 190 About this Report Attachment 1 Page 231

PB_019 Budget Review - Detail for FY 2018 - 2019

Budget Centre Element Type 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 Initial Budget Revised Budget Proposed Budget March Review March Review March Review Recurrent Non-Recurrent Total Movement Movement Movement Office of the CEO

CG6180O001 - Council Support Administration Branch Revenue 0 0 0 0 0 0 Expense 321,630 321,630 301,630 0 (20,000) (20,000) Net 321,630 321,630 301,630 0 (20,000) (20,000) Justification: $20,000 Expenditure Reduction.

General Review:

$20,000 savings offered from the operational budget as the forecast expenditure is less than the budget for the year.

CG6180O002 - External Training Overhead Revenue 0 0 0 0 0 0 Expense 21,800 21,800 6,800 0 (15,000) (15,000) Net 21,800 21,800 6,800 0 (15,000) (15,000) Justification: $15,000 Expenditure Reduction.

General Review:

$15,000 savings offered from the Training budget as the forecast expenditure is less than the budget for the year.

PB_019 Budget Review - Detail City of Gold Coast-IN-CONFIDENCE Page : 85 of 190 About this Report Attachment 1 Page 232

PB_019 Budget Review - Detail for FY 2018 - 2019

Budget Centre Element Type 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 Initial Budget Revised Budget Proposed Budget March Review March Review March Review Recurrent Non-Recurrent Total Movement Movement Movement Office of the CEO

CG6200O001 - Councillor Support Revenue (4,160) (4,160) (4,160) 0 0 0 Expense 3,162,800 3,162,800 3,130,800 0 (32,000) (32,000) Net 3,158,640 3,158,640 3,126,640 0 (32,000) (32,000) Justification: $32,000 Expenditure Reduction.

General Review:

$32,000 savings offered from the operational budget as the forecast expenditure is less than the budget for the year.

CG6200O004 - Computer Hardware/Software < $10000 Revenue 0 0 0 0 0 0 Expense 15,100 15,100 10,100 0 (5,000) (5,000) Net 15,100 15,100 10,100 0 (5,000) (5,000) Justification: $5,000 Expenditure Reduction.

General Review:

$5,000 savings offered as the forecast expenditure is less than the budget for the year.

PB_019 Budget Review - Detail City of Gold Coast-IN-CONFIDENCE Page : 86 of 190 About this Report Attachment 1 Page 233

PB_019 Budget Review - Detail for FY 2018 - 2019

Budget Centre Element Type 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 Initial Budget Revised Budget Proposed Budget March Review March Review March Review Recurrent Non-Recurrent Total Movement Movement Movement Office of the CEO

ED5670O002 - Commonwealth Games City Operations Revenue 0 0 0 0 0 0 Expense 0 197,779 262,661 0 64,882 64,882 Net 0 197,779 262,661 0 64,882 64,882 Justification: $64,882 Expenditure Increase

Intra-Directorate Transfer:

$64,882 transferred from Legacy contingency (CC 1007415) to 55233-9740 (ED5670o002) in relation to late invoices received for media advertising for the Games from Zenith.

Total for Directorate: Office of the CEO

Revenue (5,381,490) (7,156,799) (7,413,830) 0 (257,031) (257,031) Expense 35,407,651 52,423,254 51,943,685 0 (479,569) (479,569) Net 30,026,161 45,266,455 44,529,855 0 (736,600) (736,600)

PB_019 Budget Review - Detail City of Gold Coast-IN-CONFIDENCE Page : 87 of 190 About this Report Attachment 1 Page 234

PB_019 Budget Review - Detail for FY 2018 - 2019

Budget Centre Element Type 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 Initial Budget Revised Budget Proposed Budget March Review March Review March Review Recurrent Non-Recurrent Total Movement Movement Movement Office of the COO

CG5810C001 - General Loan Borrowings Revenue (33,946,101) (40,226,301) (40,576,301) 0 (350,000) (350,000) Expense 0 0 0 0 0 0 Net (33,946,101) (40,226,301) (40,576,301) 0 (350,000) (350,000) Justification: $350,000 Revenue Increase

General Review:

General Loan borrowings to be increased by $350,000 to fund the sixth purchase of the MHA site at Kirra Tourist Park.

PB_019 Budget Review - Detail City of Gold Coast-IN-CONFIDENCE Page : 88 of 190 About this Report Attachment 1 Page 235

PB_019 Budget Review - Detail for FY 2018 - 2019

Budget Centre Element Type 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 Initial Budget Revised Budget Proposed Budget March Review March Review March Review Recurrent Non-Recurrent Total Movement Movement Movement Office of the COO

CG5850O002 - Administrative Operations Revenue 0 (281,414) (696,719) 0 (415,305) (415,305) Expense 0 9,000 9,000 0 0 0 Net 0 (272,414) (687,719) 0 (415,305) (415,305) Justification: $415,305 Revenue Increase

General Review:

Invoice Pending Account - $415,305 revenue increase.

The review of the Invoice Pending account (GRIR) has resulted in a credit balance of $415,305 in 2018-19 budget, Expenses are recognised against a cost centre / project when goods are received against a purchase order and this also results in a corresponding credit to the invoice pending liability account. The invoice pending liability account is reviewed on a regular basis for old outstanding purchase order receipts with no matching invoice and such receipts are reversed to clear the liability and correct the profit and loss. Where the purchase order receipt (expense) relates to a prior financial year, this results in a credit to revenue.

PB_019 Budget Review - Detail City of Gold Coast-IN-CONFIDENCE Page : 89 of 190 About this Report Attachment 1 Page 236

PB_019 Budget Review - Detail for FY 2018 - 2019

Budget Centre Element Type 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 Initial Budget Revised Budget Proposed Budget March Review March Review March Review Recurrent Non-Recurrent Total Movement Movement Movement Office of the COO

CG5850O004 - Financial Systems Mtce Revenue 0 0 0 0 0 0 Expense 155,350 275,098 305,098 0 30,000 30,000 Net 155,350 275,098 305,098 0 30,000 30,000 Justification: $30,000 Expenditure Increase

Intra- Directorate Transfer:

$30,000 budget is transferred from BC: CG5860O002 CC1005417 to fund the initial cost of implementing of the new Treasury system, the budget is transferred to this budget centre to keep all the cost associated with the new Treasury system in budget centre.

CG5850O011 - Corporate Finance Administration Revenue 0 0 0 0 0 0 Expense 42,000 42,000 32,000 0 (10,000) (10,000) Net 42,000 42,000 32,000 0 (10,000) (10,000) Justification: $10,000 Expenditure Reduction.

General Review:

$10,000 non-recurrent reduction to the administration budget as the forecast expenditure for the year is less than the initial budget.

PB_019 Budget Review - Detail City of Gold Coast-IN-CONFIDENCE Page : 90 of 190 About this Report Attachment 1 Page 237

PB_019 Budget Review - Detail for FY 2018 - 2019

Budget Centre Element Type 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 Initial Budget Revised Budget Proposed Budget March Review March Review March Review Recurrent Non-Recurrent Total Movement Movement Movement Office of the COO

CG5860O002 - Financial Development Revenue 0 0 0 0 0 0 Expense 30,700 150,260 120,260 0 (30,000) (30,000) Net 30,700 150,260 120,260 0 (30,000) (30,000) Justification: $30,000 Expenditure Reduction

Intra-Directorate Transfer:

$30,000 budget is transferred to BC: CG5850O004 CC1005408 to fund the initial cost of implementing of the new Treasury system, the budget is transferred to this budget centre to keep all the cost associated with the new Treasury system in one budget centre.

CG5870O001 - Capital Reserve - Parks & Recreation Revenue 0 0 0 0 0 0 Expense 7,743,000 7,743,000 7,793,000 0 50,000 50,000 Net 7,743,000 7,743,000 7,793,000 0 50,000 50,000 Justification: $50,000 Expenditure Increase.

General Review:

An additional $50,000 is requested to be transferred to Parks and Recreational Reserve as the revenue received from levy is higher than the anticipated revenue due to increased number of rateable properties.

PB_019 Budget Review - Detail City of Gold Coast-IN-CONFIDENCE Page : 91 of 190 About this Report Attachment 1 Page 238

PB_019 Budget Review - Detail for FY 2018 - 2019

Budget Centre Element Type 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 Initial Budget Revised Budget Proposed Budget March Review March Review March Review Recurrent Non-Recurrent Total Movement Movement Movement Office of the COO

CG5870O003 - Open Space Transfer to Reserve Revenue 0 0 0 0 0 0 Expense 10,932,000 10,932,000 11,007,000 0 75,000 75,000 Net 10,932,000 10,932,000 11,007,000 0 75,000 75,000 Justification: $75,000 Expenditure Increase.

General Review:

An additional $75,000 is requested to be transferred to Open Space Reserve as the revenue received from levy is higher than the anticipated revenue due to increased number of rateable properties.

CG5870O004 - City Transport Improvmnt Separate Charge Revenue 0 0 0 0 0 0 Expense 33,642,000 33,642,000 33,867,000 0 225,000 225,000 Net 33,642,000 33,642,000 33,867,000 0 225,000 225,000 Justification: $225,000 Expenditure Increase.

General Review:

An additional $225,000 is requested to be transferred to City Transport Improvement Separate charges Reserve as the revenue received from levy is higher than the anticipated revenue due to increased number of rateable properties.

CG5870O006 - Transfers To and From Reserves

PB_019 Budget Review - Detail City of Gold Coast-IN-CONFIDENCE Page : 92 of 190 About this Report Attachment 1 Page 239

PB_019 Budget Review - Detail for FY 2018 - 2019

Budget Centre Element Type 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 Initial Budget Revised Budget Proposed Budget March Review March Review March Review Recurrent Non-Recurrent Total Movement Movement Movement Office of the COO Revenue (583,665) (703,665) (2,126,665) 0 (1,423,000) (1,423,000) Expense 15,508,600 33,191,122 33,846,222 0 655,100 655,100 Net 14,924,935 32,487,457 31,719,557 0 (767,900) (767,900) Justification: $655,100 Expenditure Increase $1,423,000 Revenue Increase

General Review:

$655,100 Expenditure Increase

Cultural Precinct Reserve - $305,100 Expenditure increase.

$305,100 is requested to be transferred to Cultural Precinct Reserve. As per Council Resolution G17.0517.007, it was resolved that the revenue from Gold Coast Airport Ex Gratia Rates will be used to fund the Cultural Precinct Stage 1. This expenditure budget is offset by the revenue increase in BC:CG5870O008.

Tourist Park Reserve - $350,000 Expenditure increase.

$350,000 requested to be transferred to Tourist Park Reserve to cover the capital expenditure associated with the Kirra Beach Tourist Park. This funding request is to purchase a property from a Kirra Beach Tourist Park resident under a special circumstances application as part of the MHA acquisition at Kirra Beach Tourist Park.

$1,423,000 Revenue Increase

The funding plan for Stage 1A of the Cultural Precinct included $27 million of proceeds from land sales, much of which was received after the funds were required for the project. The project received a bridging loan from the Investment Fund Reserve to help manage the cash flow issues that this presented. The loan to the Investment Fund Reserve was scheduled to be repaid partly in 2018-19 and partly in 2019-20. The initial budget included the repayment to the Investment Fund Reserve but not the proceeds from the sale of properties, which have now all been transferred to the Cultural Precinct Reserve. This transfer from reserve is to provide the funding for the repayment to the Investment Fund Reserve. As the repayment was included in the initial budget, this transfer will have a favourable impact on the budget bottom line.

PB_019 Budget Review - Detail City of Gold Coast-IN-CONFIDENCE Page : 93 of 190 About this Report Attachment 1 Page 240

PB_019 Budget Review - Detail for FY 2018 - 2019

Budget Centre Element Type 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 Initial Budget Revised Budget Proposed Budget March Review March Review March Review Recurrent Non-Recurrent Total Movement Movement Movement Office of the COO

CG5870O008 - Contribution Revenue Revenue (2,000,000) (2,000,000) (2,305,100) 0 (305,100) (305,100) Expense 0 0 0 0 0 0 Net (2,000,000) (2,000,000) (2,305,100) 0 (305,100) (305,100) Justification: $305,100 Revenue Increase.

General Review:

$305,100 revenue received from Gold Coast Airport (Ex Gratia Rates) for 2018-19. This revenue increase is offset by an expenditure increase in BC: CG5870O006.

CG5880N003 - Income Tax Equivalent - Waste Revenue 0 0 0 0 0 0 Expense (10,442,439) (10,442,439) (10,408,871) 0 33,568 33,568 Net (10,442,439) (10,442,439) (10,408,871) 0 33,568 33,568 Justification: $33,568 Revenue Reduction

Inter-Directorate Transfer:

Tax Equivalent revenue (30%) from Waste Management is reduced by $33,568. As a result of the various budgetary changes recorded as part of the March 2019 budget review in Waste Management business unit, a minor reduction (less than 0.5%) to Tax Equivalent Revenue receivable from Waste Management.

PB_019 Budget Review - Detail City of Gold Coast-IN-CONFIDENCE Page : 94 of 190 About this Report Attachment 1 Page 241

PB_019 Budget Review - Detail for FY 2018 - 2019

Budget Centre Element Type 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 Initial Budget Revised Budget Proposed Budget March Review March Review March Review Recurrent Non-Recurrent Total Movement Movement Movement Office of the COO

CG5880N004 - Income Tax Equivalent - Tourist Pks Revenue 0 0 0 0 0 0 Expense (1,676,277) (1,676,277) (1,421,150) 0 255,127 255,127 Net (1,676,277) (1,676,277) (1,421,150) 0 255,127 255,127 Justification: 255,127 Revenue Reduction

Inter-Directorate Transfer:

Tax Equivalent revenue receivable (30%) from Tourist Parks is reduced by $255,127. This is due to reduced profitability of the Parks as a consequence of lower revenues and additional maintenance costs.

CG5880N009 - Dividend Tourist Parks to Council Revenue 0 0 0 0 0 0 Expense (2,206,248) (2,206,248) (2,417,320) 0 (211,072) (211,072) Net (2,206,248) (2,206,248) (2,417,320) 0 (211,072) (211,072) Justification: $211,072 Revenue Increase

Inter-Directorate Transfer:

Dividend from Tourist Parks is increased by $211,072. Increase to dividend during the year is usually transferred to Tourist Park reserves, but considering the 2018-19 financial performance, the Tourist Parks business unit has opted to pay a dividend to Council to offset part of the reduction to Tax Equivalent revenue receivable.

PB_019 Budget Review - Detail City of Gold Coast-IN-CONFIDENCE Page : 95 of 190 About this Report Attachment 1 Page 242

PB_019 Budget Review - Detail for FY 2018 - 2019

Budget Centre Element Type 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 Initial Budget Revised Budget Proposed Budget March Review March Review March Review Recurrent Non-Recurrent Total Movement Movement Movement Office of the COO

CG5880N013 - Income Tax Equivalent - Water Revenue 0 0 0 0 0 0 Expense (40,899,274) (40,899,274) (40,324,391) 0 574,883 574,883 Net (40,899,274) (40,899,274) (40,324,391) 0 574,883 574,883 Justification: $574,883 Revenue Reduction

Inter-Directorate Transfer:

Tax Equivalent revenue (30%) from Water & Sewerage business unit is reduced by $574,883. Water and Sewerage business unit has recorded a number of budgetary changes throughout the financial year, this has resulted in a reduction to Tax Equivalent Revenue receivable (less than 1.5%) from Water & Sewerage business unit.

PB_019 Budget Review - Detail City of Gold Coast-IN-CONFIDENCE Page : 96 of 190 About this Report Attachment 1 Page 243

PB_019 Budget Review - Detail for FY 2018 - 2019

Budget Centre Element Type 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 Initial Budget Revised Budget Proposed Budget March Review March Review March Review Recurrent Non-Recurrent Total Movement Movement Movement Office of the COO

CG6030O001 - Workers' Comp Administration Revenue (110,600) (110,600) (510,600) 0 (400,000) (400,000) Expense (320,960) (101,960) 298,040 0 400,000 400,000 Net (431,560) (212,560) (212,560) 0 0 0 Justification: $400,000 Expenditure Increase $400,000 Revenue Increase

General Review:

A review of the worker compensation claims expenditure as at 4 March 2019 indicates that there is an increase in estimated payments for 2018-19. Payments to 30-06-2019 are now expected to be approximately $5.46M (including overheads), therefore the Claims budget is requested to be increased by $400,000 and this increase is offset by a transfer of $400,000 from Workers’ Compensation Reserve.

The actuarial forecast of claim payments for the 2018-19 financial year totalled $4.661M. The budget including overheads (license fee, excess of loss insurance etc) is $5.06M

Claim expenditure to date is $3.7M and includes a payment of $693,505 for a latent onset claim by a worker exposed to asbestos while an employee in 1980-90s. The Actuary did not forecast lodgement of a latent onset claim in 2018-19 but had made provision for latent onset claims in the reserve.

Also expenditure on common law claims is expected to be higher than forecast due to a higher number of claims settled than expected.

The effect on the reserve is unknown at this time as our claim experience can be very volatile from year to year. It would be therefore be prudent to await the actuarial report due in July.

PB_019 Budget Review - Detail City of Gold Coast-IN-CONFIDENCE Page : 97 of 190 About this Report Attachment 1 Page 244

PB_019 Budget Review - Detail for FY 2018 - 2019

Budget Centre Element Type 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 Initial Budget Revised Budget Proposed Budget March Review March Review March Review Recurrent Non-Recurrent Total Movement Movement Movement Office of the COO

CG6070O002 - Risk Governance Services Revenue 0 0 0 0 0 0 Expense 214,500 287,750 257,750 0 (30,000) (30,000) Net 214,500 287,750 257,750 0 (30,000) (30,000) Justification: $30,000 Expenditure Reduction

General Review:

$30,000 will be offered as a one-off savings as the actual forecast is expected to be lower than the initial budget.

CG6070O003 - Health and Injury Management Services Revenue 0 0 0 0 0 0 Expense 989,560 1,013,695 958,970 0 (54,725) (54,725) Net 989,560 1,013,695 958,970 0 (54,725) (54,725) Justification: $54,725 Expenditure Reduction.

General review: $14,725 will be offered as a one-off savings as the actual forecast for Pre-medical is expected to be lower than the initial budget due to number of tests done.

$40,000 will be offered as a one-off savings as the actual forecast for Rehabilitation Services is expected to be lower than the initial budget due to a reduction in medical costs to treat the injuries is dropped in this year.

CG6070O009 - WHS Governance Services

PB_019 Budget Review - Detail City of Gold Coast-IN-CONFIDENCE Page : 98 of 190 About this Report Attachment 1 Page 245

PB_019 Budget Review - Detail for FY 2018 - 2019

Budget Centre Element Type 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 Initial Budget Revised Budget Proposed Budget March Review March Review March Review Recurrent Non-Recurrent Total Movement Movement Movement Office of the COO Revenue 0 0 0 0 0 0 Expense 1,163,960 1,434,946 1,614,946 0 180,000 180,000 Net 1,163,960 1,434,946 1,614,946 0 180,000 180,000

PB_019 Budget Review - Detail City of Gold Coast-IN-CONFIDENCE Page : 99 of 190 About this Report Attachment 1 Page 246

PB_019 Budget Review - Detail for FY 2018 - 2019

Budget Centre Element Type 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 Initial Budget Revised Budget Proposed Budget March Review March Review March Review Recurrent Non-Recurrent Total Movement Movement Movement Office of the COO Justification: $180,000 Expenditure Increase

General Review:

$80,000 Non-Recurrent Expenditure budget requested for an Asset WHS Risk Review.

In October 2018 Corporate Asset Management in conjunction with Corporate Safety and Risk obtained the services of AUS Safe consulting to conduct audits on the City’s Electrical & Communication Pits, Conduits, Poles & Cables. From this it was identified that an asset WHS risk review was required and there is a need of going to market to source an external provider to conduct this service. It is estimated that approximately $80,000 will require for the Asset WHS Risk Review-Electrical & Communication Pits, Conduits, Poles & Cables contract.

Corporate Safety and Risks identified a savings of $84,725 within the branch (Budget Centres CG6070O002 -$30,000) and CG6070O003 -$54,725) and requested that this savings to be used to fund this budget request.

$100,000 Non-Recurrent Expenditure budget is requested to comply with the Heavy Vehicle National Law

$100,000 is requested to provide a temporary resource for 12 months to scope and develop the relevant procedures and supporting documents to comply with the Heavy Vehicle National Law.

In October 2018, the Heavy Vehicle National Law (HVNL) was amended to specify that every party in the heavy vehicle transport supply chain has a primary duty of care to ensure the safety of their transport activities. The supply chain typically includes the employer of a driver, the operator of the vehicle, a scheduler for the vehicle, a loading manager for any goods in the vehicle, loader and/or unloader of the vehicle, a consignor of any goods for transport by the vehicle, a consignee of any goods in the vehicle and a loader and/or unloader of any goods in the vehicle. In a prosecution, the courts may consider the actions of each party in the supply chain. This includes what measures those parties have in place to prevent breaches of the HVNL occurring. Each party in the chain must demonstrate to the Court that they took all reasonable steps to prevent the contravention or show the court that there were no steps they could reasonably be expected to have taken to prevent the contravention.

This requirement applies across various areas of Council, but specific examples include the transfer of waste by truck from recycle centres to landfill and the transport and delivery of plant and equipment to construction sites.

As with workplace health & safety, an effective safety management system will assist Council in complying with legislative obligations to meet the Heavy Vehicle National Law.

In order to address the legislation, a gap analysis is required to identify procedures that require development to meet the Heavy Vehicle National Law.

PB_019 Budget Review - Detail City of Gold Coast-IN-CONFIDENCE Page : 100 of 190 About this Report Attachment 1 Page 247

PB_019 Budget Review - Detail for FY 2018 - 2019

Budget Centre Element Type 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 Initial Budget Revised Budget Proposed Budget March Review March Review March Review Recurrent Non-Recurrent Total Movement Movement Movement Office of the COO

CG6080O001 - Premiums - Captive Insurance Revenue 0 0 0 0 0 0 Expense 4,029,200 4,029,200 3,232,223 0 (796,977) (796,977) Net 4,029,200 4,029,200 3,232,223 0 (796,977) (796,977) Justification: $796,977 Expenditure reduction

General Review:

Insurance premium expense budget reduced by $796,977 in this review as the actual premium paid for the year is less than the budget.

PB_019 Budget Review - Detail City of Gold Coast-IN-CONFIDENCE Page : 101 of 190 About this Report Attachment 1 Page 248

PB_019 Budget Review - Detail for FY 2018 - 2019

Budget Centre Element Type 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 Initial Budget Revised Budget Proposed Budget March Review March Review March Review Recurrent Non-Recurrent Total Movement Movement Movement Office of the COO

CG6080O004 - Industrial Special Risk/Property-Captive Revenue (326,900) (326,900) (583,300) 0 (256,400) (256,400) Expense 408,600 408,600 358,600 0 (50,000) (50,000) Net 81,700 81,700 (224,700) 0 (306,400) (306,400) Justification: $60,000 Expenditure Reduction. $256,400 Revenue Increase.

General Review:

Expenditure budget reduced by $50,000 as the number of claims to date is lower than the planned expenditure and it is expected that the trend will be continuing for the rest of the financial year.

$256,400 increase to Revenue budget is required based on the trend for the rest of the financial year. The increase to revenue budget is from reimbursement from City of Gold Coast Insurance Company (CGCIC) and recovery of damages to Council assets. Reimbursement from CGCIC for the 1st half of the year exceeds the annual revenue budget, and also there are a number of claims settled in the 2nd half of the year are expected to be fully reimbursed in June 2019 payment.

PB_019 Budget Review - Detail City of Gold Coast-IN-CONFIDENCE Page : 102 of 190 About this Report Attachment 1 Page 249

PB_019 Budget Review - Detail for FY 2018 - 2019

Budget Centre Element Type 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 Initial Budget Revised Budget Proposed Budget March Review March Review March Review Recurrent Non-Recurrent Total Movement Movement Movement Office of the COO

CG6080O006 - Liability - Captive Insurance Revenue (1,553,800) (4,053,800) (5,053,800) 0 (1,000,000) (1,000,000) Expense 1,942,100 4,442,100 5,579,500 0 1,137,400 1,137,400 Net 388,300 388,300 525,700 0 137,400 137,400 Justification: $1,137,400 Expenditure Increase $1,000,000 Revenue Increase

General Review:

An additional $1,137,400 expense budget is requested to fund the increased number of claims and settlements in this financial year. $1,000,000 is expected to be reimbursed by the City of Gold Coast Insurance Company in this financial year.

PB_019 Budget Review - Detail City of Gold Coast-IN-CONFIDENCE Page : 103 of 190 About this Report Attachment 1 Page 250

PB_019 Budget Review - Detail for FY 2018 - 2019

Budget Centre Element Type 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 Initial Budget Revised Budget Proposed Budget March Review March Review March Review Recurrent Non-Recurrent Total Movement Movement Movement Office of the COO

CG6080O007 - Other Classes - Captive Insurance Revenue (367,700) (367,700) (105,700) 0 262,000 262,000 Expense 459,600 459,600 100,000 (100,000) (259,600) (359,600) Net 91,900 91,900 (5,700) (100,000) 2,400 (97,600) Justification: $359,600 Expenditure Reduction. $262,000 Revenue Reduction.

General Review:

Expenditure budget reduced by $359,600.

$100,000 is transferred to Directors & Officers Liability (Budget Centre CG6080O013) as the cost to this class is increasing due to the legislative changes a new budget Centre is created to capture the cost separately.

$259,600 is requested to be reduced as the number of claims to date, in relation to other classes (Compulsory Third Party, Computer breakdown, Contract works, Corporate Travel, Councillors and Officers Liability, Fidelity Guarantee, Marine Hull, Personal Accident) is lower than the planned expenditure and it is expected that the trend will be continuing for the rest of the financial year.

Revenue budget reduced by $262,000 due to the reduction in claims expenditure it is expected that the reimbursement will be minimal for the rest of the year.

PB_019 Budget Review - Detail City of Gold Coast-IN-CONFIDENCE Page : 104 of 190 About this Report Attachment 1 Page 251

PB_019 Budget Review - Detail for FY 2018 - 2019

Budget Centre Element Type 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 Initial Budget Revised Budget Proposed Budget March Review March Review March Review Recurrent Non-Recurrent Total Movement Movement Movement Office of the COO

CG6080O009 - Administration Services Operations Revenue 0 0 0 0 0 0 Expense 380,000 380,000 389,200 0 9,200 9,200 Net 380,000 380,000 389,200 0 9,200 9,200 Justification: $9,200 Expenditure Increase.

General Review:

One Temporary Administration and Project Officer (Level 4 annual cost $82,900) is requested for 14 months.

$9,200 Expenditure increase is requested in this review to fund the 2 months labour cost. This increase to the expense budget is offset by the increase to revenue in BC:CG6080O004.

At the present time administrative support is provided by Legal Services. The Unit handles considerably more liability claims in-house thereby reducing the reliance on external lawyers as well as now being responsible for recovering from negligent Third Parties the cost of damaged Council infrastructure, such as traffic lights, road barriers etc. Both of these additional activities are financially benefiting Council.

The role of the Coordinator Insurance has been significantly expanded to include educational and mentoring activities designed to reduce claims and enhance the Captive’s financial performance, by reducing Council's risk profile.

The Administration and Project Officer will pick up the tasks currently performed by Legal Services and assist in the new initiatives.

The Insurance section has commenced the process to pursue recovery of damages to Council assets, $60,407 has been successfully recovered to-date, and further claims have been pursued and are pending payment by third parties.

Additional budget is not required as this position will be funded from additional funds recovered from third party recovery of damage to Council assets

PB_019 Budget Review - Detail City of Gold Coast-IN-CONFIDENCE Page : 105 of 190 About this Report Attachment 1 Page 252

PB_019 Budget Review - Detail for FY 2018 - 2019

Budget Centre Element Type 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 Initial Budget Revised Budget Proposed Budget March Review March Review March Review Recurrent Non-Recurrent Total Movement Movement Movement Office of the COO

CG6080O013 - Directors/Officers Liability - Captive Revenue 0 0 0 0 0 0 Expense 0 0 100,000 100,000 0 100,000 Net 0 0 100,000 100,000 0 100,000 Justification: $100,000 Expenditure Increase.

General Review:

$100,000 expenditure budget is requested to be transferred from Other Classes (Budget Centre CG6080O013 to this budget Centre to capture the cost of Councillors & Officers Liability. This budget broadly covers the legal costs and penalties (as defined) associated with proceedings or complaints lodged against Councillors or Officers as a result of their work related duties.

CG6100O001 - Corp Planning Performance Revenue 0 0 (55,000) 0 (55,000) (55,000) Expense 2,402,790 2,554,070 2,780,070 0 226,000 226,000 Net 2,402,790 2,554,070 2,725,070 0 171,000 171,000 Justification: $226,000 Expenditure Increase. $55,000 Revenue Increase

General Review:

P3M Program - $109,000

The successful implementation of Project On-line for Water & Waste in late 2017-18 has provided the first cloud based portfolio, program and project management solution for the City. This solution provides real-time information on projects and remote access on mobile devices, so the solution can be used in the field. As Directorates transition their projects onto this new solution, two legacy city project management solutions (PMIS 2010 and Clarity) will be retired, providing real-time and timely information from a single source of truth for City projects. The implementation of this project is being delivered in 3 phases: PB_019 Budget Review - Detail City of Gold Coast-IN-CONFIDENCE Page : 106 of 190 • Phase 1 - the solution went live late in 2017-18 and Water and Waste Directorate transitioned its project business onto the solution in August 2018. In 2018-19, the solution has About this Report supported both the planning and delivery of over 300 Water and Waste Directorate projects, with 300 solution users across the city.

• Phase 2 of the project in 2018-19 has focused on ensuring the solution provides the capability required to support the transition of the Transport & Infrastructure Directorate as well as all remaining Directorates planning and delivering infrastructure projects. The solution is expected to be ready to support Directorate transitions from 1 July 2019, with relevant Directorates transitioning through 2019-20.

Funding approved for Phase 2 of the project ($180,000) only provided for a part-time project manager in 2018-19 and the project has identified that additional resources are required to support the finalisation of this project phase, an additional $109,000. This additional funding requested will provide the project with a full-time specialist project manager (additional $85,000) and a part-time testing lead ($24,000). Both of these resources are highly technical and not available from business as usual resources. It is anticipated that implementation will be completed by 30 June 2019.

• Phase 3 of the project in 2019-20 will focus on ensuring that the solution provides the capability to support all other project types (business change and technology). This final phase will complete the capability required to run all project types, enabling all remaining Directorates to transition their projects onto a single city solution. Funding includes a project manager (full-time - $290,000 ) and development/implementation costs for identified enhancements ($100,000).

Project On-Line Solution Support service - $55,000 Expenditure Increase & Revenue Increase

Water & Waste agreed to fund $55,000 towards the Project on line solution support. Both expenditure & revenue budget is increased to reflect the budget increase. There is nil impact to Council's budget.

Inter-Directorate Transfer - $46,500 Intra- Directorate Transfer - $15,500

Project Management Methodology - $62,000.

There is a need to develop a documented project management methodology for non-infrastructure projects which will be supported via the Enterprise Lifecycle (in Project On-line / EPMS). This will support Directorates to transition to Project On-line through 2019-20.

It is proposed that this work will be progressed during early 2019, for completion prior to 30 June 2019 using an out-sourced contractor (yet to be identified/ appointed). An estimated cost of $62,000 has been identified to complete this work, based on sharing this cost across the 4 Directorates who have expressed an initial interest, the cost per Directorate to complete this

work is currently estimated at $15,500 (in 2018-19).

High level scope for this piece of work The indicative high level scope of work/ deliverables and cost estimate is as follows:

• Enterprise Project Management Methodology (planning and delivery) for non-infrastructure projects in MS Word Format (docx), with the methodology incorporating specialist components e.g. ICT; Digital City; Procurement; resource/capacity management etc - $24,000 • Train the trainer slide-deck with speaker notes - $5,000 • Delivery of 2x16 person 1 day train the trainer sessions and training collateral on the methodology $5,000 • Recommended changes to EPMS (i.e. gap analysis between the methodology and configured solution) that includes the following information Field Name, Description, Data Type, PWA Behaviour (Required, Workflow Controlled, Not required), Lookup values, Calculation, Workflow control stage) $16,000 • Infrastructure Project Management Methodology (planning only - pre-gate 0 to gate 1) $12,000

$62,000 is requested to be transferred from Economy, Planning & Environment (BC:PE5100O005 CC1004873), Lifestyle & Community (BC: CS4000O017, Project 32054), Organisational Services (BC: OS7800O002 CC1006171) and Office of the COO/Office of the CEO (BC:6260O005 CC1005582 -10,000 & CC1007153 - $5,500) each contributing $15,500. Attachment 1 Page 253

PB_019$226,000 Expenditure Budget Increase. Review - Detail for FY 2018 - 2019 $55,000 Revenue Increase

GeneralBudget CentreReview: Element Type 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 Initial Budget Revised Budget Proposed Budget March Review March Review March Review P3M Program - $109,000 Recurrent Non-Recurrent Total Movement Movement Movement The successful implementation of Project On-line for Water & Waste in late 2017-18 has provided the first cloud based portfolio, program and project management solution for the City. OfficeThis solution of theprovides COO real-time information on projects and remote access on mobile devices, so the solution can be used in the field. As Directorates transition their projects onto this newJustification: solution, two legacy city project management solutions (PMIS 2010 and Clarity) will be retired, providing real-time and timely information from a single source of truth for City projects. The implementation of this project is being delivered in 3 phases:

• Phase 1 - the solution went live late in 2017-18 and Water and Waste Directorate transitioned its project business onto the solution in August 2018. In 2018-19, the solution has supported both the planning and delivery of over 300 Water and Waste Directorate projects, with 300 solution users across the city.

• Phase 2 of the project in 2018-19 has focused on ensuring the solution provides the capability required to support the transition of the Transport & Infrastructure Directorate as well as all remaining Directorates planning and delivering infrastructure projects. The solution is expected to be ready to support Directorate transitions from 1 July 2019, with relevant Directorates transitioning through 2019-20.

Funding approved for Phase 2 of the project ($180,000) only provided for a part-time project manager in 2018-19 and the project has identified that additional resources are required to support the finalisation of this project phase, an additional $109,000. This additional funding requested will provide the project with a full-time specialist project manager (additional $85,000) and a part-time testing lead ($24,000). Both of these resources are highly technical and not available from business as usual resources. It is anticipated that implementation will be completed by 30 June 2019.

• Phase 3 of the project in 2019-20 will focus on ensuring that the solution provides the capability to support all other project types (business change and technology). This final phase will complete the capability required to run all project types, enabling all remaining Directorates to transition their projects onto a single city solution. Funding includes a project manager (full-time - $290,000 ) and development/implementation costs for identified enhancements ($100,000).

Project On-Line Solution Support service - $55,000 Expenditure Increase & Revenue Increase

Water & Waste agreed to fund $55,000 towards the Project on line solution support. Both expenditure & revenue budget is increased to reflect the budget increase. There is nil impact to Council's budget.

Inter-Directorate Transfer - $46,500 Intra- Directorate Transfer - $15,500

Project Management Methodology - $62,000.

There is a need to develop a documented project management methodology for non-infrastructure projects which will be supported via the Enterprise Lifecycle (in Project On-line / EPMS). This will support Directorates to transition to Project On-line through 2019-20.

It is proposed that this work will be progressed during early 2019, for completion prior to 30 June 2019 using an out-sourced contractor (yet to be identified/ appointed). An estimated cost of $62,000 has been identified to complete this work, based on sharing this cost across the 4 Directorates who have expressed an initial interest, the cost per Directorate to complete this PB_019 Budget Review - Detail City of Gold Coast-IN-CONFIDENCE Page : 107 of 190 work is currently estimated at $15,500 (in 2018-19). About this Report

High level scope for this piece of work The indicative high level scope of work/ deliverables and cost estimate is as follows:

• Enterprise Project Management Methodology (planning and delivery) for non-infrastructure projects in MS Word Format (docx), with the methodology incorporating specialist components e.g. ICT; Digital City; Procurement; resource/capacity management etc - $24,000 • Train the trainer slide-deck with speaker notes - $5,000 • Delivery of 2x16 person 1 day train the trainer sessions and training collateral on the methodology $5,000 • Recommended changes to EPMS (i.e. gap analysis between the methodology and configured solution) that includes the following information Field Name, Description, Data Type, PWA Behaviour (Required, Workflow Controlled, Not required), Lookup values, Calculation, Workflow control stage) $16,000 • Infrastructure Project Management Methodology (planning only - pre-gate 0 to gate 1) $12,000

$62,000 is requested to be transferred from Economy, Planning & Environment (BC:PE5100O005 CC1004873), Lifestyle & Community (BC: CS4000O017, Project 32054), Organisational Services (BC: OS7800O002 CC1006171) and Office of the COO/Office of the CEO (BC:6260O005 CC1005582 -10,000 & CC1007153 - $5,500) each contributing $15,500. $226,000 Expenditure Increase. $55,000 Revenue Increase

General Review:

P3M Program - $109,000

The successful implementation of Project On-line for Water & Waste in late 2017-18 has provided the first cloud based portfolio, program and project management solution for the City. This solution provides real-time information on projects and remote access on mobile devices, so the solution can be used in the field. As Directorates transition their projects onto this new solution, two legacy city project management solutions (PMIS 2010 and Clarity) will be retired, providing real-time and timely information from a single source of truth for City projects. The implementation of this project is being delivered in 3 phases:

• Phase 1 - the solution went live late in 2017-18 and Water and Waste Directorate transitioned its project business onto the solution in August 2018. In 2018-19, the solution has supported both the planning and delivery of over 300 Water and Waste Directorate projects, with 300 solution users across the city.

• Phase 2 of the project in 2018-19 has focused on ensuring the solution provides the capability required to support the transition of the Transport & Infrastructure Directorate as well as all remaining Directorates planning and delivering infrastructure projects. The solution is expected to be ready to support Directorate transitions from 1 July 2019, with relevant Directorates transitioning through 2019-20.

Funding approved for Phase 2 of the project ($180,000) only provided for a part-time project manager in 2018-19 and the project has identified that additional resources are required to support the finalisation of this project phase, an additional $109,000. This additional funding requested will provide the project with a full-time specialist project manager (additional $85,000) and a part-time testing lead ($24,000). Both of these resources are highly technical and not available from business as usual resources. It is anticipated that implementation will be completed by 30 June 2019.

• Phase 3 of the project in 2019-20 will focus on ensuring that the solution provides the capability to support all other project types (business change and technology). This final phase will complete the capability required to run all project types, enabling all remaining Directorates to transition their projects onto a single city solution. Funding includes a project manager (full-time - $290,000 ) and development/implementation costs for identified enhancements ($100,000).

Project On-Line Solution Support service - $55,000 Expenditure Increase & Revenue Increase Attachment 1 Water & Waste agreed to fund $55,000 towards the Project on line solution support. Both expenditure & revenue budget is increased to reflect the budget increase. There is nil impact toPage 254 Council's budget.

PB_019Inter-Directorate Budget Transfer - $46,500 Review - Detail for FY 2018 - 2019 Intra- Directorate Transfer - $15,500

BudgetProject Management Centre Element Methodology Type - $62,000. 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 Initial Budget Revised Budget Proposed Budget March Review March Review March Review Recurrent Non-Recurrent Total Movement There is a need to develop a documented project management methodology for non-infrastructure projects which will be supported viaMovement the Enterprise LifecycleMovement (in Project On-line / EPMS). This will support Directorates to transition to Project On-line through 2019-20. Office of the COO Justification:It is proposed that this work will be progressed during early 2019, for completion prior to 30 June 2019 using an out-sourced contractor (yet to be identified/ appointed). An estimated cost of $62,000 has been identified to complete this work, based on sharing this cost across the 4 Directorates who have expressed an initial interest, the cost per Directorate to complete this

work is currently estimated at $15,500 (in 2018-19).

High level scope for this piece of work The indicative high level scope of work/ deliverables and cost estimate is as follows:

• Enterprise Project Management Methodology (planning and delivery) for non-infrastructure projects in MS Word Format (docx), with the methodology incorporating specialist components e.g. ICT; Digital City; Procurement; resource/capacity management etc - $24,000 • Train the trainer slide-deck with speaker notes - $5,000 • Delivery of 2x16 person 1 day train the trainer sessions and training collateral on the methodology $5,000 • Recommended changes to EPMS (i.e. gap analysis between the methodology and configured solution) that includes the following information Field Name, Description, Data Type, PWA Behaviour (Required, Workflow Controlled, Not required), Lookup values, Calculation, Workflow control stage) $16,000 • Infrastructure Project Management Methodology (planning only - pre-gate 0 to gate 1) $12,000

$62,000 is requested to be transferred from Economy, Planning & Environment (BC:PE5100O005 CC1004873), Lifestyle & Community (BC: CS4000O017, Project 32054), Organisational Services (BC: OS7800O002 CC1006171) and Office of the COO/Office of the CEO (BC:6260O005 CC1005582 -10,000 & CC1007153 - $5,500) each contributing $15,500.

CG6250O003 - Cost Centre Plant Overhead Revenue 0 0 0 0 0 0 Expense 161,207 161,207 162,980 0 1,773 1,773 Net 161,207 161,207 162,980 0 1,773 1,773 Justification: $1,773 Expenditure Increase.

Inter- Directorate Transfer:

A net of $1,773 transferred from Organisational Services BC:OS7800O004 CC1006792 to fund the transfer of vehicle to Office of the COO.

PB_019 Budget Review - Detail City of Gold Coast-IN-CONFIDENCE Page : 108 of 190 About this Report Attachment 1 Page 255

PB_019 Budget Review - Detail for FY 2018 - 2019

Budget Centre Element Type 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 Initial Budget Revised Budget Proposed Budget March Review March Review March Review Recurrent Non-Recurrent Total Movement Movement Movement Office of the COO

CG6260O001 - OCOO Operational Costs Revenue 0 0 (23,559) 0 (23,559) (23,559) Expense 137,400 137,400 148,233 0 10,833 10,833 Net 137,400 137,400 124,674 0 (12,726) (12,726) Justification: $10,833 Expenditure Reduction $23,559Revenue Increase.

General Review:

$23,559 revenue increase represents the staff contribution to Staff Christmas Function and $27,833 expense budget is requested to be increased to cover the cost of the Staff Christmas function.

$12,000 reduction to Petty Cash budget and $5,000 reduction to Courier charges as the budget is not required for the rest of 2018-19.

PB_019 Budget Review - Detail City of Gold Coast-IN-CONFIDENCE Page : 109 of 190 About this Report Attachment 1 Page 256

PB_019 Budget Review - Detail for FY 2018 - 2019

Budget Centre Element Type 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 Initial Budget Revised Budget Proposed Budget March Review March Review March Review Recurrent Non-Recurrent Total Movement Movement Movement Office of the COO

CG6260O002 - Office Furniture and Equipment Revenue 0 0 0 0 0 0 Expense 15,300 15,300 8,300 0 (7,000) (7,000) Net 15,300 15,300 8,300 0 (7,000) (7,000) Justification: 7,000 Expenditure Reduction.

General Review:

$7,000 reduction to expenditure budget as it's not required for the rest of 2018-19.

CG6260O003 - Recruitment Revenue 0 0 0 0 0 0 Expense 20,500 20,500 5,500 0 (15,000) (15,000) Net 20,500 20,500 5,500 0 (15,000) (15,000) Justification: $15,000 Expenditure Reduction.

General Review:

$15,000 reduction to expenditure budget as it's not required for the rest of 2018-19.

PB_019 Budget Review - Detail City of Gold Coast-IN-CONFIDENCE Page : 110 of 190 About this Report Attachment 1 Page 257

PB_019 Budget Review - Detail for FY 2018 - 2019

Budget Centre Element Type 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 Initial Budget Revised Budget Proposed Budget March Review March Review March Review Recurrent Non-Recurrent Total Movement Movement Movement Office of the COO

CG6260O005 - Computer Hardware/Software < $10000 Revenue 0 0 0 0 0 0 Expense 59,700 99,700 84,200 0 (15,500) (15,500) Net 59,700 99,700 84,200 0 (15,500) (15,500) Justification: $15,500 Expenditure Reduction

Intra-Directorate Transfer

$15,500 transferred from CC1005582 ($10,000) and CC1007153 ($5,500) to BC:CG6100O001 CC1005532 to facilitate the development of a documented project management methodology for non-infrastructure projects which will be supported via the Enterprise Lifecycle (in Project On-line / EPMS). This will support Directorates to transition to Project On-line through 2019-20.

CG6360O002 - Corporate Comm - Digital/Social Media Revenue 0 0 (37,838) 0 (37,838) (37,838) Expense 397,730 351,840 389,678 0 37,838 37,838 Net 397,730 351,840 351,840 0 0 0 Justification: $37,838 Expenditure Increase $37,838 Revenue Increase

General Review:

The unit has secured some external photography work, which has secured some external revenue, but this increase in revenue is offset by a reduction to internal cost recovery (expense) as the unit was able to do this external work as part of the total Photography cost recovery.

CG6370O002 - Asset Management Improvement Program

PB_019 Budget Review - Detail City of Gold Coast-IN-CONFIDENCE Page : 111 of 190 About this Report Attachment 1 Page 258

PB_019 Budget Review - Detail for FY 2018 - 2019

Budget Centre Element Type 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 Initial Budget Revised Budget Proposed Budget March Review March Review March Review Recurrent Non-Recurrent Total Movement Movement Movement Office of the COO Revenue 0 0 0 0 0 0 Expense 237,860 407,167 717,167 0 310,000 310,000 Net 237,860 407,167 717,167 0 310,000 310,000 Justification: $310,000 Expenditure Increase

General Review:

Program & Project Management of asset management improvements - $20,000.

Additional funding for program & project management of asset management improvements across the organisation One (1) Full-time Temporary Position: Level 8 10-day fortnight for two (2) years.

Note: This position is required for two (2) years. Approval of funding via the March 2019 Revised Budget (along with funding already available in the Corporate Asset Management 2018-19 branch budget) provides funding for the first year for this position. A further budget submission to be made via the 2020-21 budget process to fund the second year for this position.

Further advancing asset management practices across the organisation is critical to ensure ongoing delivery of asset-based services to the community. The challenge of managing the City's large (nearly $19B) and diverse infrastructure asset base is increasing as the asset base continues to grow along with a large portion of the long life infrastructure aging and therefore needing a much greater asset management focus to manage risks and maintain service delivery.

The Asset Management Improvement Program is in place to support Asset Custodians in Transport & Infrastructure, Water & Waste, Lifestyle & Community & Organisational Services (Property Services) and the Corporate Asset Management branch in further advancing their asset management practices. The most recent detailed Asset Management Maturity Assessment identified 113 improvement opportunities, with the Asset Management Improvement Program now having over 600 identified initiatives/actions. These initiatives cover a wide range of improvements such as: - Improving integrity of and access to asset information to support a wide of business needs eg. Asset Revaluations (and other Queensland Audit Office requirements), Asset Management Plans, various operational business functions, etc. - More rigour in identifying defects and undertaking condition assessments of assets - Ensuring all Asset Management Plans meet minimum requirements and are further advanced to optimise asset investment decision making - Further developing the organisation's asset management policies and frameworks to better enable management of asset based services

ItPB_019 is important Budget to Review note that - Detail one of the seven key findings of the most recent Asset Management MaturityCity of Gold Assessment Coast-IN-CONFIDENCE (conducted by specialist consultants) was "need to strengthen thePage : 112 of 190 whole-of-organisation approach to driving asset management improvements", including "program management needs to be strengthened". About this Report Corporate Asset Management has funding available in the 2018-19 branch budget for a position to support coordination of these asset management improvements, however due to an increase in the scope and complexity of improvement initiatives for the coming two (2) year period a higher level resource is required. Therefore additional funding of $20,000 is required.

The increase in scope and complexity for this position includes being the project manager for the re-development of the Asset Management Framework that has not been reviewed since 2009 and needs to be completely re-built to better support Asset Custodians in Transport & Infrastructure, Water & Waste, Lifestyle & Community and Organisational Services (Property Services) in managing the City's infrastructure asset base. This will include aligning with the International Standards for Asset Management that were first released five years ago, with there being a clear industry trend of large asset intensive organisations (including Water Utilities) adopting and implementing the International Standards to increase the level of rigour in managing infrastructure assets.

Coordination of Maintenance Management improvements - $140,000.

Funding is requested for Coordination of Maintenance Management improvements across the organisation One (1) Full-time Temporary Position: Level 8 10-day fortnight for two (2) years.

Note: This position is required for two (2) years. Approval of funding via the March 2019 Revised Budget provides funding for the first year for this position. A further budget submission to be made via the 2020-21 budget process to fund the second year for this position.

The new integrated Maintenance Management System and associated field mobile computing solution were implemented as part of the ERP Project Release 2 go-live in May 2014. With the initial focus being on getting the basic maintenance practices in place for infrastructure and fleet assets.

A detailed maturity assessment of maintenance practices was recently completed that included Transport & Infrastructure, Water & Waste, Lifestyle & Community, Organisational Services (Property Services & Fleet). The maturity assessment identified 112 improvement opportunities that have potential to add substantial benefits across all of these areas and the associated road, drainage, water, sewer, parks and community building assets, including: - Further leveraging the capabilities of the Maintenance Management System that was implemented in 2014 - Recording better information on completed maintenance activities to inform future budgets and make decisions on the types of maintenance needed. - Improved planning and scheduling of maintenance works, so there is a better understanding of when work will be done, along with improving the ability to bundle up work to be done in a particular area resulting is less trips by work crews - Investigating options for better procurement arrangements for maintenance parts & materials, to get better deals for the City and potentially reduce travel time for work crews picking up parts & materials

The maturity assessment also highlighted why improving maintenance practices are important, as the City has: - Over one and half million infrastructure and fleet assets - A maintenance & operations field workforce of around 1000 staff with more than 500 mobile devices (i.e. iPADs) deployed to support maintenance & operations functions - Over a quarter of a million Work Orders are undertaken annually - A range of maintenance & operation functions undertaken through contracts with external providers.

This position is required to support Transport & Infrastructure, Water & Waste, Lifestyle & Community and Organisational Services (Property Services & Fleet) in improving maintenance practices through: - Provide information to the directors to inform the prioritisation of improvement initiatives, including information on the dependencies between improvement initiatives - Develop an overall implementation plan for improving maintenance practices - Coordinating the improvement initiatives identified in the recent maturity assessment that involve multiple directorates - Supporting the directorates with the collation and justification of ICT system needs/changes - Providing status reports to directors

Note: The Full-Time Temporary Level 8 Position for 18 months that undertook the detailed maturity assessment finished in February 2019. The requested position is a continuation of this work.

Enhancement of Asset & Maintenance Management ICT Systems - $150,000

Funding is requested for Enhancement of Asset & Maintenance Management ICT Systems.

As part of the ERP Project Release 2 the following Asset & Maintenance ICT Systems were implemented and went live in May 2014: - A consolidated Asset Register to record and manage asset data - The new integrated Maintenance Management System and associated field mobile computing work order management application

There are over 1.5 million infrastructure and fleet assets recorded in these ICT systems, with these ICT systems dispatching over a quarter of a million Work Orders annually (via 500 field mobile devices) to the City’s maintenance & operations field workforce of around 1000 staff

Since these systems went live five years ago, Asset Custodians and Maintenance areas in Transport & Infrastructure, Water & Waste, Lifestyle & Community and Organisational Services (Fleet & Property Services) have identified 23 different Asset & Maintenance Management ICT improvements needed to underpin delivery of asset based services to the community.

This funded is needed to support the directorates in progressing immediate priorities through: - Development of a project plan to deliver priority Asset & Maintenance Management ICT items - Providing a solution for capturing and storing information from asset defect & condition assessment field inspections for a range of asset types such as roads, bridges (including detailed structural inspections), pathways, retaining walls, playgrounds, electrical assets, etc. - Investigating option to provide external contractors with access to the City’s Maintenance Management System to ensure Work Orders can be quickly issued to external contractors and the details of work undertaken by the external contractors can be uploaded into the City’s Maintenance Management System.

The above items are key ICT capabilities that the directorates need to maintain the City’s assets and manage the risk associated with these assets. $310,000 Expenditure Increase

General Review:

Program & Project Management of asset management improvements - $20,000.

Additional funding for program & project management of asset management improvements across the organisation One (1) Full-time Temporary Position: Level 8 10-day fortnight for two (2) years.

Note: This position is required for two (2) years. Approval of funding via the March 2019 Revised Budget (along with funding already available in the Corporate Asset Management 2018-19 branch budget) provides funding for the first year for this position. A further budget submission to be made via the 2020-21 budget process to fund the second year for this position.

Further advancing asset management practices across the organisation is critical to ensure ongoing delivery of asset-based services to the community. The challenge of managingAttachment the 1 City's large (nearly $19B) and diverse infrastructure asset base is increasing as the asset base continues to grow along with a large portion of the long life infrastructure aging and Page 259 therefore needing a much greater asset management focus to manage risks and maintain service delivery.

The Asset Management Improvement Program is in place to support Asset Custodians in Transport & Infrastructure, Water & Waste, Lifestyle & Community & Organisational Services (Property Services) and the Corporate Asset Management branch in further advancing their asset management practices. The most recent detailed Asset Management Maturity AssessmentPB_019 identified Budget 113 improvement Review opportunities, - Detail with thefor Asset FY Management 2018 -Improvement 2019 Program now having over 600 identified initiatives/actions. These initiatives cover a wide range of improvements such as: - Improving integrity of and access to asset information to support a wide of business needs eg. Asset Revaluations (and other Queensland Audit Office requirements), Asset Budget Centre Element Type 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 Management Plans, various operational business functions, etc. Initial Budget Revised Budget Proposed Budget March Review March Review March Review - More rigour in identifying defects and undertaking condition assessments of assets Recurrent Non-Recurrent Total Movement - Ensuring all Asset Management Plans meet minimum requirements and are further advanced to optimise asset investment decision making Movement Movement - Further developing the organisation's asset management policies and frameworks to better enable management of asset based services Office of the COO Justification: It is important to note that one of the seven key findings of the most recent Asset Management Maturity Assessment (conducted by specialist consultants) was "need to strengthen the whole-of-organisation approach to driving asset management improvements", including "program management needs to be strengthened".

Corporate Asset Management has funding available in the 2018-19 branch budget for a position to support coordination of these asset management improvements, however due to an increase in the scope and complexity of improvement initiatives for the coming two (2) year period a higher level resource is required. Therefore additional funding of $20,000 is required.

The increase in scope and complexity for this position includes being the project manager for the re-development of the Asset Management Framework that has not been reviewed since 2009 and needs to be completely re-built to better support Asset Custodians in Transport & Infrastructure, Water & Waste, Lifestyle & Community and Organisational Services (Property Services) in managing the City's infrastructure asset base. This will include aligning with the International Standards for Asset Management that were first released five years ago, with there being a clear industry trend of large asset intensive organisations (including Water Utilities) adopting and implementing the International Standards to increase the level of rigour in managing infrastructure assets.

Coordination of Maintenance Management improvements - $140,000.

Funding is requested for Coordination of Maintenance Management improvements across the organisation One (1) Full-time Temporary Position: Level 8 10-day fortnight for two (2) years.

Note: This position is required for two (2) years. Approval of funding via the March 2019 Revised Budget provides funding for the first year for this position. A further budget submission to be made via the 2020-21 budget process to fund the second year for this position.

The new integrated Maintenance Management System and associated field mobile computing solution were implemented as part of the ERP Project Release 2 go-live in May 2014. With the initial focus being on getting the basic maintenance practices in place for infrastructure and fleet assets.

A detailed maturity assessment of maintenance practices was recently completed that included Transport & Infrastructure, Water & Waste, Lifestyle & Community, Organisational Services (Property Services & Fleet). The maturity assessment identified 112 improvement opportunities that have potential to add substantial benefits across all of these areas and the associated road, drainage, water, sewer, parks and community building assets, including: - Further leveraging the capabilities of the Maintenance Management System that was implemented in 2014 - Recording better information on completed maintenance activities to inform future budgets and make decisions on the types of maintenance needed. - Improved planning and scheduling of maintenance works, so there is a better understanding of when work will be done, along with improving the ability to bundle up work to be done in a particular area resulting is less trips by work crews - Investigating options for better procurement arrangements for maintenance parts & materials, to get better deals for the City and potentially reduce travel time for work crews picking up parts & materials

The maturity assessment also highlighted why improving maintenance practices are important, as the City has: PB_019 Budget Review - Detail City of Gold Coast-IN-CONFIDENCE Page : 113 of 190 - Over one and half million infrastructure and fleet assets - A maintenance & operations field workforce of around 1000 staff with more than 500 mobile devices (i.e. iPADs) deployed to support maintenance & operations functions About this Report - Over a quarter of a million Work Orders are undertaken annually - A range of maintenance & operation functions undertaken through contracts with external providers.

This position is required to support Transport & Infrastructure, Water & Waste, Lifestyle & Community and Organisational Services (Property Services & Fleet) in improving maintenance practices through: - Provide information to the directors to inform the prioritisation of improvement initiatives, including information on the dependencies between improvement initiatives - Develop an overall implementation plan for improving maintenance practices - Coordinating the improvement initiatives identified in the recent maturity assessment that involve multiple directorates - Supporting the directorates with the collation and justification of ICT system needs/changes - Providing status reports to directors

Note: The Full-Time Temporary Level 8 Position for 18 months that undertook the detailed maturity assessment finished in February 2019. The requested position is a continuation of this work.

Enhancement of Asset & Maintenance Management ICT Systems - $150,000

Funding is requested for Enhancement of Asset & Maintenance Management ICT Systems.

As part of the ERP Project Release 2 the following Asset & Maintenance ICT Systems were implemented and went live in May 2014: - A consolidated Asset Register to record and manage asset data - The new integrated Maintenance Management System and associated field mobile computing work order management application

There are over 1.5 million infrastructure and fleet assets recorded in these ICT systems, with these ICT systems dispatching over a quarter of a million Work Orders annually (via 500 field mobile devices) to the City’s maintenance & operations field workforce of around 1000 staff

Since these systems went live five years ago, Asset Custodians and Maintenance areas in Transport & Infrastructure, Water & Waste, Lifestyle & Community and Organisational Services (Fleet & Property Services) have identified 23 different Asset & Maintenance Management ICT improvements needed to underpin delivery of asset based services to the community.

This funded is needed to support the directorates in progressing immediate priorities through: - Development of a project plan to deliver priority Asset & Maintenance Management ICT items - Providing a solution for capturing and storing information from asset defect & condition assessment field inspections for a range of asset types such as roads, bridges (including detailed structural inspections), pathways, retaining walls, playgrounds, electrical assets, etc. - Investigating option to provide external contractors with access to the City’s Maintenance Management System to ensure Work Orders can be quickly issued to external contractors and the details of work undertaken by the external contractors can be uploaded into the City’s Maintenance Management System.

The above items are key ICT capabilities that the directorates need to maintain the City’s assets and manage the risk associated with these assets. $310,000 Expenditure Increase

General Review:

Program & Project Management of asset management improvements - $20,000.

Additional funding for program & project management of asset management improvements across the organisation One (1) Full-time Temporary Position: Level 8 10-day fortnight for two (2) years.

Note: This position is required for two (2) years. Approval of funding via the March 2019 Revised Budget (along with funding already available in the Corporate Asset Management 2018-19 branch budget) provides funding for the first year for this position. A further budget submission to be made via the 2020-21 budget process to fund the second year for this position.

Further advancing asset management practices across the organisation is critical to ensure ongoing delivery of asset-based services to the community. The challenge of managing the City's large (nearly $19B) and diverse infrastructure asset base is increasing as the asset base continues to grow along with a large portion of the long life infrastructure aging and therefore needing a much greater asset management focus to manage risks and maintain service delivery.

The Asset Management Improvement Program is in place to support Asset Custodians in Transport & Infrastructure, Water & Waste, Lifestyle & Community & Organisational Services (Property Services) and the Corporate Asset Management branch in further advancing their asset management practices. The most recent detailed Asset Management Maturity Assessment identified 113 improvement opportunities, with the Asset Management Improvement Program now having over 600 identified initiatives/actions. These initiatives cover a wide range of improvements such as: - Improving integrity of and access to asset information to support a wide of business needs eg. Asset Revaluations (and other Queensland Audit Office requirements), Asset Management Plans, various operational business functions, etc. - More rigour in identifying defects and undertaking condition assessments of assets - Ensuring all Asset Management Plans meet minimum requirements and are further advanced to optimise asset investment decision making - Further developing the organisation's asset management policies and frameworks to better enable management of asset based services

It is important to note that one of the seven key findings of the most recent Asset Management Maturity Assessment (conducted by specialist consultants) was "need to strengthen the whole-of-organisation approach to driving asset management improvements", including "program management needs to be strengthened".

Corporate Asset Management has funding available in the 2018-19 branch budget for a position to support coordination of these asset management improvements, however due to an increase in the scope and complexity of improvement initiatives for the coming two (2) year period a higher level resource is required. Therefore additional funding of $20,000 is required.

The increase in scope and complexity for this position includes being the project manager for the re-development of the Asset Management Framework that has not been reviewed since 2009 and needs to be completely re-built to better support Asset Custodians in Transport & Infrastructure, Water & Waste, Lifestyle & Community and Organisational Services (Property Services) in managing the City's infrastructure asset base. This will include aligning with the International Standards for Asset Management that were first released five years ago, with there being a clear industry trend of large asset intensive organisations (including Water Utilities) adopting and implementing the International Standards to increase the level of rigour in managing infrastructure assets.

Coordination of Maintenance Management improvements - $140,000.

Funding is requested for Coordination of Maintenance Management improvements across the organisation One (1) Full-time Temporary Position: Level 8 10-day fortnight for two (2) years.

Note: This position is required for two (2) years. Approval of funding via the March 2019 Revised Budget provides funding for the first year for this position. A further budget submissionAttachment 1 to be made via the 2020-21 budget process to fund the second year for this position. Page 260 The new integrated Maintenance Management System and associated field mobile computing solution were implemented as part of the ERP Project Release 2 go-live in May 2014. With the initial focus being on getting the basic maintenance practices in place for infrastructure and fleet assets.

PB_019A detailed maturity Budget assessment Review of maintenance - Detailpractices was for recently FY completed 2018 that- 2019 included Transport & Infrastructure, Water & Waste, Lifestyle & Community, Organisational Services (Property Services & Fleet). The maturity assessment identified 112 improvement opportunities that have potential to add substantial benefits across all of these areas and the associated road, drainage, water, sewer, parks and community building assets, including: -Budget Further Centre leveragingElement the capabilities Type of the Maintenance Management2018 - 2019 System that was2018 implemented - 2019 in 20142018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 - Recording better information on completed maintenanceInitial activities Budget to inform futureRevised budgets Budget and makeProposed decisions Budget on the types of maintenanceMarch Review needed. March Review March Review - Improved planning and scheduling of maintenance works, so there is a better understanding of when work will be done, along with improvingRecurrent the ability toNon-Recurrent bundle up work to be doneTotal in a Movement particular area resulting is less trips by work crews Movement Movement Office- Investigating of the options COO for better procurement arrangements for maintenance parts & materials, to get better deals for the City and potentially reduce travel time for work crews picking up parts & materials Justification: The maturity assessment also highlighted why improving maintenance practices are important, as the City has: - Over one and half million infrastructure and fleet assets - A maintenance & operations field workforce of around 1000 staff with more than 500 mobile devices (i.e. iPADs) deployed to support maintenance & operations functions - Over a quarter of a million Work Orders are undertaken annually - A range of maintenance & operation functions undertaken through contracts with external providers.

This position is required to support Transport & Infrastructure, Water & Waste, Lifestyle & Community and Organisational Services (Property Services & Fleet) in improving maintenance practices through: - Provide information to the directors to inform the prioritisation of improvement initiatives, including information on the dependencies between improvement initiatives - Develop an overall implementation plan for improving maintenance practices - Coordinating the improvement initiatives identified in the recent maturity assessment that involve multiple directorates - Supporting the directorates with the collation and justification of ICT system needs/changes - Providing status reports to directors

Note: The Full-Time Temporary Level 8 Position for 18 months that undertook the detailed maturity assessment finished in February 2019. The requested position is a continuation of this work.

Enhancement of Asset & Maintenance Management ICT Systems - $150,000

Funding is requested for Enhancement of Asset & Maintenance Management ICT Systems.

As part of the ERP Project Release 2 the following Asset & Maintenance ICT Systems were implemented and went live in May 2014: - A consolidated Asset Register to record and manage asset data - The new integrated Maintenance Management System and associated field mobile computing work order management application

There are over 1.5 million infrastructure and fleet assets recorded in these ICT systems, with these ICT systems dispatching over a quarter of a million Work Orders annually (via 500 field mobile devices) to the City’s maintenance & operations field workforce of around 1000 staff

Since these systems went live five years ago, Asset Custodians and Maintenance areas in Transport & Infrastructure, Water & Waste, Lifestyle & Community and Organisational Services (Fleet & Property Services) have identified 23 different Asset & Maintenance Management ICT improvements needed to underpin delivery of asset based services to the community.

This funded is needed to support the directorates in progressing immediate priorities through: - Development of a project plan to deliver priority Asset & Maintenance Management ICT items - Providing a solution for capturing and storing information from asset defect & condition assessment field inspections for a range of asset types such as roads, bridges (including detailed structuralPB_019 Budget inspections), Review - pathways,Detail retaining walls, playgrounds, electrical assets, etc. City of Gold Coast-IN-CONFIDENCE Page : 114 of 190 - Investigating option to provide external contractors with access to the City’s Maintenance Management System to ensure Work Orders can be quickly issued to external contractorsAbout and this Report the details of work undertaken by the external contractors can be uploaded into the City’s Maintenance Management System.

The above items are key ICT capabilities that the directorates need to maintain the City’s assets and manage the risk associated with these assets. $310,000 Expenditure Increase

General Review:

Program & Project Management of asset management improvements - $20,000.

Additional funding for program & project management of asset management improvements across the organisation One (1) Full-time Temporary Position: Level 8 10-day fortnight for two (2) years.

Note: This position is required for two (2) years. Approval of funding via the March 2019 Revised Budget (along with funding already available in the Corporate Asset Management 2018-19 branch budget) provides funding for the first year for this position. A further budget submission to be made via the 2020-21 budget process to fund the second year for this position.

Further advancing asset management practices across the organisation is critical to ensure ongoing delivery of asset-based services to the community. The challenge of managing the City's large (nearly $19B) and diverse infrastructure asset base is increasing as the asset base continues to grow along with a large portion of the long life infrastructure aging and therefore needing a much greater asset management focus to manage risks and maintain service delivery.

The Asset Management Improvement Program is in place to support Asset Custodians in Transport & Infrastructure, Water & Waste, Lifestyle & Community & Organisational Services (Property Services) and the Corporate Asset Management branch in further advancing their asset management practices. The most recent detailed Asset Management Maturity Assessment identified 113 improvement opportunities, with the Asset Management Improvement Program now having over 600 identified initiatives/actions. These initiatives cover a wide range of improvements such as: - Improving integrity of and access to asset information to support a wide of business needs eg. Asset Revaluations (and other Queensland Audit Office requirements), Asset Management Plans, various operational business functions, etc. - More rigour in identifying defects and undertaking condition assessments of assets - Ensuring all Asset Management Plans meet minimum requirements and are further advanced to optimise asset investment decision making - Further developing the organisation's asset management policies and frameworks to better enable management of asset based services

It is important to note that one of the seven key findings of the most recent Asset Management Maturity Assessment (conducted by specialist consultants) was "need to strengthen the whole-of-organisation approach to driving asset management improvements", including "program management needs to be strengthened".

Corporate Asset Management has funding available in the 2018-19 branch budget for a position to support coordination of these asset management improvements, however due to an increase in the scope and complexity of improvement initiatives for the coming two (2) year period a higher level resource is required. Therefore additional funding of $20,000 is required.

The increase in scope and complexity for this position includes being the project manager for the re-development of the Asset Management Framework that has not been reviewed since 2009 and needs to be completely re-built to better support Asset Custodians in Transport & Infrastructure, Water & Waste, Lifestyle & Community and Organisational Services (Property Services) in managing the City's infrastructure asset base. This will include aligning with the International Standards for Asset Management that were first released five years ago, with there being a clear industry trend of large asset intensive organisations (including Water Utilities) adopting and implementing the International Standards to increase the level of rigour in managing infrastructure assets.

Coordination of Maintenance Management improvements - $140,000.

Funding is requested for Coordination of Maintenance Management improvements across the organisation One (1) Full-time Temporary Position: Level 8 10-day fortnight for two (2) years.

Note: This position is required for two (2) years. Approval of funding via the March 2019 Revised Budget provides funding for the first year for this position. A further budget submission to be made via the 2020-21 budget process to fund the second year for this position.

The new integrated Maintenance Management System and associated field mobile computing solution were implemented as part of the ERP Project Release 2 go-live in May 2014. With the initial focus being on getting the basic maintenance practices in place for infrastructure and fleet assets.

A detailed maturity assessment of maintenance practices was recently completed that included Transport & Infrastructure, Water & Waste, Lifestyle & Community, Organisational Services (Property Services & Fleet). The maturity assessment identified 112 improvement opportunities that have potential to add substantial benefits across all of these areas and the associated road, drainage, water, sewer, parks and community building assets, including: - Further leveraging the capabilities of the Maintenance Management System that was implemented in 2014 - Recording better information on completed maintenance activities to inform future budgets and make decisions on the types of maintenance needed. - Improved planning and scheduling of maintenance works, so there is a better understanding of when work will be done, along with improving the ability to bundle up work to be done in a particular area resulting is less trips by work crews - Investigating options for better procurement arrangements for maintenance parts & materials, to get better deals for the City and potentially reduce travel time for work crews picking up parts & materials

The maturity assessment also highlighted why improving maintenance practices are important, as the City has: - Over one and half million infrastructure and fleet assets - A maintenance & operations field workforce of around 1000 staff with more than 500 mobile devices (i.e. iPADs) deployed to support maintenance & operations functions - Over a quarter of a million Work Orders are undertaken annually - A range of maintenance & operation functions undertaken through contracts with external providers.

This position is required to support Transport & Infrastructure, Water & Waste, Lifestyle & Community and Organisational Services (Property Services & Fleet) in improving maintenance practices through: - Provide information to the directors to inform the prioritisation of improvement initiatives, including information on the dependencies between improvement initiatives - Develop an overall implementation plan for improving maintenance practices - Coordinating the improvement initiatives identified in the recent maturity assessment that involve multiple directorates - Supporting the directorates with the collation and justification of ICT system needs/changes - Providing status reports to directors

Note: The Full-Time Temporary Level 8 Position for 18 months that undertook the detailed maturity assessment finished in February 2019. The requested position is a continuation of this work.

Enhancement of Asset & Maintenance Management ICT Systems - $150,000 Attachment 1 Funding is requested for Enhancement of Asset & Maintenance Management ICT Systems. Page 261

As part of the ERP Project Release 2 the following Asset & Maintenance ICT Systems were implemented and went live in May 2014: - A consolidated Asset Register to record and manage asset data PB_019- The new integrated Budget Maintenance Review Management - Detail System and for associated FY field2018 mobile - computing2019 work order management application

There are over 1.5 million infrastructure and fleet assets recorded in these ICT systems, with these ICT systems dispatching over a quarter of a million Work Orders annually (via 500 field mobileBudget devices) Centre to Elementthe City’s Typemaintenance & operations field2018 workforce - 2019 of around 10002018 staff - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 Initial Budget Revised Budget Proposed Budget March Review March Review March Review Since these systems went live five years ago, Asset Custodians and Maintenance areas in Transport & Infrastructure, Water & Waste,Recurrent Lifestyle & CommunityNon-Recurrent and Organisational ServicesTotal Movement (Fleet & Property Services) have identified 23 different Asset & Maintenance Management ICT improvements needed to underpin deliveryMovement of asset based servicesMovement to the community.

OfficeThis funded of isthe needed COO to support the directorates in progressing immediate priorities through: -Justification: Development of a project plan to deliver priority Asset & Maintenance Management ICT items - Providing a solution for capturing and storing information from asset defect & condition assessment field inspections for a range of asset types such as roads, bridges (including detailed structural inspections), pathways, retaining walls, playgrounds, electrical assets, etc. - Investigating option to provide external contractors with access to the City’s Maintenance Management System to ensure Work Orders can be quickly issued to external contractors and the details of work undertaken by the external contractors can be uploaded into the City’s Maintenance Management System.

The above items are key ICT capabilities that the directorates need to maintain the City’s assets and manage the risk associated with these assets.

CG6400O001 - Mayoral Support Operations Revenue 0 0 0 0 0 0 Expense 1,633,493 1,754,736 1,709,736 0 (45,000) (45,000) Net 1,633,493 1,754,736 1,709,736 0 (45,000) (45,000) Justification: $45,000 Expenditure Reduction

General Review:

$50,000 savings offered from the operational budget $25,000 from IR Cost Centre 1006434 and another $25,000 from Advocacy Cost Centre 1007493 as the forecast expenditure is less than the budget for the year.

$5,000 transferred from Community Grants Program (CE8230O001) to Mayor’s Concert budget in Mayoral Support BC: CG640O001 CC1008449 as per Council Resolution G18.1113.022.

ED5710O006 - Major Events Support

PB_019 Budget Review - Detail City of Gold Coast-IN-CONFIDENCE Page : 115 of 190 About this Report Attachment 1 Page 262

PB_019 Budget Review - Detail for FY 2018 - 2019

Budget Centre Element Type 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 Initial Budget Revised Budget Proposed Budget March Review March Review March Review Recurrent Non-Recurrent Total Movement Movement Movement Office of the COO Revenue (150,000) (250,000) (780,000) 0 (530,000) (530,000) Expense 3,854,017 4,459,526 4,989,526 0 530,000 530,000 Net 3,704,017 4,209,526 4,209,526 0 0 0 Justification: $573,600 Expenditure Increase $573,600 Revenue Increase

General Review:

Eurovision (Australia Decides) CC1007455 - $150,000

Council resolved (G18.0921.018) that the Council will contribute a maximum of $150,000 with funding to be allocated from the Events Reserve.

Sport Accord (CC1007901) - $300,000

City of Gold Coast will contribute $300,000 cash to support the Sport Accord Convention and this expenditure budget to be funded from Events Reserve (Council Resolution - G18.0814.019).

Combined Churches Easter Event (CC1007296) - $80,000

Council resolved that the Council will provide one-off support to the 2019 Combined Churches Easter Celebrations to be held in April 2019 at the HOTA Outdoor Stage via Kind of support of up to $80,000, and the source of funds being the Events Reserve (G19.0130.028).

Intra-Directorate Transfer:

$43,600 transferred from Unallocated Events budget to the followings to cover the increase expenditure.

· International Triathlon Union World Series (CC1000473)- $24,000 · Building Maintenance (CC1005298) - $6,200 · GC film Fantastic (CC1005318) - $9,300 · Swell Sculpture Festival (CC1005357) - $4,100

PB_019 Budget Review - Detail City of Gold Coast-IN-CONFIDENCE Page : 116 of 190 About this Report Attachment 1 Page 263

PB_019 Budget Review - Detail for FY 2018 - 2019

Budget Centre Element Type 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 Initial Budget Revised Budget Proposed Budget March Review March Review March Review Recurrent Non-Recurrent Total Movement Movement Movement Office of the COO

Total for Directorate: Office of the COO

Revenue (113,101,253) (250,954,524) (255,488,726) 0 (4,534,202) (4,534,202) Expense 35,771,174 54,842,718 58,059,566 0 3,216,848 3,216,848 Net (77,330,079) (196,111,806) (197,429,160) 0 (1,317,354) (1,317,354)

PB_019 Budget Review - Detail City of Gold Coast-IN-CONFIDENCE Page : 117 of 190 About this Report Attachment 1 Page 264

PB_019 Budget Review - Detail for FY 2018 - 2019

Budget Centre Element Type 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 Initial Budget Revised Budget Proposed Budget March Review March Review March Review Recurrent Non-Recurrent Total Movement Movement Movement Organisational Services

ES3000C001 - Fleet Equipment Renewal & Purchase Revenue (13,739,733) (18,800,003) (18,800,003) 0 0 0 Expense 12,739,733 24,504,912 24,504,912 0 0 0 Net (1,000,000) 5,704,909 5,704,909 0 0 0 Justification:

Nil impact. Realignment of Fleet Equipment Renewal & Purchase budgets. This transfer of budgets between capital projects is required to ensure project funding is accurately recorded. There is a nil effect on the budget from these transfers. 62333 Heavy Plant Purchases ($200,000) 62334 General Plant Purchases ($200,000) 62631 Fleet Safety Improvement $200,000 62639 Transfer Bins $200,000

PB_019 Budget Review - Detail City of Gold Coast-IN-CONFIDENCE Page : 118 of 190 About this Report Attachment 1 Page 265

PB_019 Budget Review - Detail for FY 2018 - 2019

Budget Centre Element Type 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 Initial Budget Revised Budget Proposed Budget March Review March Review March Review Recurrent Non-Recurrent Total Movement Movement Movement Organisational Services

ES3000O002 - Minor Equipment Revenue 0 0 (225,821) 0 (225,821) (225,821) Expense 0 0 225,821 0 225,821 225,821 Net 0 0 0 0 0 0 Justification: ($225,821) Revenue Increase. Increase in revenue due to transfer from Fleet reserve.

$225,821 Expenditure Increase. The increase in expenditure for Minor Equipment is due to a rise in operational costs, in particular fuel costs, and a reduction in labour recovery resulting from the re-calculation of recoverable hours in the workshops and operational areas. In total, $401,944 is proposed to be absorbed through a transfer from the Fleet Renewal & Purchase Reserve.

ES3000O005 - Two Way Radios Revenue 0 0 (152,054) 0 (152,054) (152,054) Expense 0 0 152,054 0 152,054 152,054 Net 0 0 0 0 0 0 Justification: ($152,054) Revenue Increase. Increase in revenue due to transfer from Fleet reserve.

$152,054 Expenditure Increase. The increase in expenditure for Two Way Radios is due to a rise in operational costs, in particular fuel costs, and a reduction in labour recovery resulting from the re-calculation of recoverable hours in the workshops and operational areas. In total $123,488 is proposed to be absorbed through a transfer from the Fleet Renewal & Purchase Reserve.

PB_019 Budget Review - Detail City of Gold Coast-IN-CONFIDENCE Page : 119 of 190 About this Report Attachment 1 Page 266

PB_019 Budget Review - Detail for FY 2018 - 2019

Budget Centre Element Type 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 Initial Budget Revised Budget Proposed Budget March Review March Review March Review Recurrent Non-Recurrent Total Movement Movement Movement Organisational Services

ES3000O006 - Fleet Indirect Overheads Revenue (5,000) (5,000) (85,000) 0 (80,000) (80,000) Expense 5,000 5,000 85,000 0 80,000 80,000 Net 0 0 0 0 0 0 Justification: ($80,000) Revenue Increase. Additional revenue from an increase in vehicle registration refunds due to the November 2018 minor equipment auction.

$80,000 Expenditure Increase. Additional funds for SAP Works Manager licensing in the Cloud. Works are currently underway to move the current solution to a cloud based solution and is required as the current version is at end of life. This solution provides mobility access for workers in the field.

ES3000O007 - Passenger Vehicles Revenue 0 0 0 0 0 0 Expense 0 0 0 0 0 0 Net 0 0 0 0 0 0 Justification: Nil impact

$102,575 Expenditure Increase & $102,575 Expenditure Decrease. The increase in expenditure for Passenger Vehicles is due to a rise in operational costs, in particular fuel costs, and a reduction in labour recovery resulting from the re-calculation of recoverable hours in the workshops and operational areas. In total, $102,575 is proposed to be absorbed through a transfer from the Fleet Renewal & Purchase Reserve.

PB_019 Budget Review - Detail City of Gold Coast-IN-CONFIDENCE Page : 120 of 190 About this Report Attachment 1 Page 267

PB_019 Budget Review - Detail for FY 2018 - 2019

Budget Centre Element Type 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 Initial Budget Revised Budget Proposed Budget March Review March Review March Review Recurrent Non-Recurrent Total Movement Movement Movement Organisational Services

ES3000O008 - Light Commercial Vehicles Revenue 0 0 0 0 0 0 Expense 0 0 0 0 0 0 Net 0 0 0 0 0 0 Justification: Nil impact

$324,798 Expenditure Increase & $324,798 Expenditure Decrease. The increase in expenditure for Light Commercial Vehicles is due to a rise in operational costs, in particular fuel costs, and a reduction in labour recovery resulting from the re-calculation of recoverable hours in the workshops and operational areas. In total, $324,798 is proposed to be absorbed through a transfer from the Fleet Renewal & Purchase Reserve.

ES3000O010 - Trucks 2T-8T Revenue 0 0 0 0 0 0 Expense 0 0 0 0 0 0 Net 0 0 0 0 0 0 Justification: Nil impact

$225,357 Expenditure Increase & $225,357 Expenditure Decrease. The increase in expenditure for Trucks 2T-8T is due to a rise in operational costs, in particular fuel costs, and a reduction in labour recovery resulting from the re-calculation of recoverable hours in the workshops and operational areas. In total, $225,357 is proposed to be absorbed through a transfer from the Fleet Renewal & Purchase Reserve.

PB_019 Budget Review - Detail City of Gold Coast-IN-CONFIDENCE Page : 121 of 190 About this Report Attachment 1 Page 268

PB_019 Budget Review - Detail for FY 2018 - 2019

Budget Centre Element Type 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 Initial Budget Revised Budget Proposed Budget March Review March Review March Review Recurrent Non-Recurrent Total Movement Movement Movement Organisational Services

ES3000O011 - Trucks >8T Revenue (650,000) (650,000) (760,000) 0 (110,000) (110,000) Expense 650,000 650,000 760,000 0 110,000 110,000 Net 0 0 0 0 0 0 Justification: ($110,000) Revenue Increase. Additional revenue is anticipated from the BAS Fuel Tax Credits.

$110,000 Expenditure Increase. ($474,084) - Reduction in maintenance and repair costs due to the replacement of older assets has resulted in a decrease in expenditure for Trucks greater than 8 tonnes. $584,084 - Transfer of surplus to Fleet Renewal & Purchase Reserve.

ES3000O012 - Heavy Plant Revenue 0 0 (22,740) 0 (22,740) (22,740) Expense 0 0 22,740 0 22,740 22,740 Net 0 0 0 0 0 0 Justification: ($22,740) Revenue Increase. Increase in revenue due to transfer from Fleet reserve.

$22,740 Expenditure Increase. The increase in expenditure for Heavy Plant is due to a rise in operational costs, in particular fuel costs, and a reduction in labour recovery resulting from the re-calculation of recoverable hours in the workshops and operational areas. In total $209,285 is proposed to be absorbed through a transfer from the Fleet Renewal & Purchase Reserve.

PB_019 Budget Review - Detail City of Gold Coast-IN-CONFIDENCE Page : 122 of 190 About this Report Attachment 1 Page 269

PB_019 Budget Review - Detail for FY 2018 - 2019

Budget Centre Element Type 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 Initial Budget Revised Budget Proposed Budget March Review March Review March Review Recurrent Non-Recurrent Total Movement Movement Movement Organisational Services

ES3000O013 - General Plant Revenue 0 0 (342,556) 0 (342,556) (342,556) Expense 0 0 342,556 0 342,556 342,556 Net 0 0 0 0 0 0 Justification: ($342,556) Revenue Increase. Increase in revenue due to transfer from Fleet reserve.

$342,556 Expenditure Increase. The increase in expenditure for General Plant is due to a rise in operational costs, in particular fuel costs, and a reduction in labour recovery resulting from the re-calculation of recoverable hours in the workshops and operational areas. In total $396,637 is proposed to be absorbed through a transfer from the Fleet Renewal & Purchase Reserve.

OS6840O001 - ICT Transformation Program Revenue 0 0 0 0 0 0 Expense 4,364,890 12,862,140 12,862,140 0 0 0 Net 4,364,890 12,862,140 12,862,140 0 0 0 Justification: Nil impact. Realignment of ICT Transformation Program budgets. This transfer of budgets between operational projects within the Business Innovation & Technology Services (BITS) branch is required to ensure project funding is accurately recorded and to consolidate funding back into the main LGP project. There is a nil effect on the budget from these transfers. 62274 Local Government Platform $1,100,000 62547 LGP Closure ($300,000) 62548 LGP - PDC Upgrade ($800,000)

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PB_019 Budget Review - Detail for FY 2018 - 2019

Budget Centre Element Type 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 Initial Budget Revised Budget Proposed Budget March Review March Review March Review Recurrent Non-Recurrent Total Movement Movement Movement Organisational Services

OS6900C001 - Depot Improvements Revenue 0 (47,000) (47,000) 0 0 0 Expense 2,039,200 2,086,097 2,086,097 0 (0) (0) Net 2,039,200 2,039,097 2,039,097 0 (0) (0) Justification:

MAJOR BUDGET REVIEW VARIATIONS

Nil impact. Realignment of Depot Improvement budgets. This transfer of budgets between capital projects is required to ensure project funding is accurately recorded. There is a nil effect on the budget from these transfers. 62487 Depot Asset Renewal ($50,000) 62493 Carrara Ring Main Replace $150,500 62496 Carrara Extend Hardstand area ($93,000) 62488 Coomera Depot Boiler Maker's Shed ($100,000) 62489 Carrara Install TV Display WH&S notices ($65,000) 62560 Carrara Depot Radio Shop ($6,000) 62649 Depot Barriers (Pedestrian Safety) $171,000 62558 Carrara Radio Tech ventilation ($7,500)

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PB_019 Budget Review - Detail for FY 2018 - 2019

Budget Centre Element Type 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 Initial Budget Revised Budget Proposed Budget March Review March Review March Review Recurrent Non-Recurrent Total Movement Movement Movement Organisational Services

OS6900C002 - SES Building Improvements Revenue 0 0 0 0 0 0 Expense 151,900 76,900 85,900 0 9,000 9,000 Net 151,900 76,900 85,900 0 9,000 9,000 Justification: $9,000 Expenditure Transfer. Realignment of SES Building Improvements budgets. This transfer of budgets between capital projects is required to ensure project funding is accurately recorded. There is a nil effect on the budget from these transfers. Refer to OS6970C003 Building Improvements. 62648 Southport DMU SES Height Safety $9,000

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PB_019 Budget Review - Detail for FY 2018 - 2019

Budget Centre Element Type 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 Initial Budget Revised Budget Proposed Budget March Review March Review March Review Recurrent Non-Recurrent Total Movement Movement Movement Organisational Services

OS6900O001 - Depot Facilities Revenue 0 0 0 0 0 0 Expense 849,037 849,037 229,037 0 (620,000) (620,000) Net 849,037 849,037 229,037 0 (620,000) (620,000) Justification: $620,000 Expenditure Decrease.

1003460 - Tugun Depot Facilities Maintenance $100,000 Funds are not required this year as future depot plans have not been confirmed. Works will be scheduled for 2019-20 depending on outcome of future plans. These works will include repairs to existing buildings, hardstands, access and fencing.

1006036 - Coomera Depot Facilities Maintenance $100,000 Funds are not required this year as future depot plans have not been confirmed. Works will be scheduled for 2019-20 depending on outcome of future plans. These works will include repairs to existing buildings, hardstands, access and fencing.

1007230 - Depot Asset Audits $120,000 Only partial audits were carried out this financial year. These will be carried out in 2019-20 to supply condition ratings for individual assets which will be used to determine more accurate lifecycle budgets for 2020-21 and subsequent years.

1007285 - Carrara Depot Facilities Maintenance $200,000 Funds not required this year as future depot plans have not been confirmed. Works will be scheduled for 2019-20 depending on outcome of future plans. These works will include repairs to existing buildings, hardstands, access and fencing.

1007286 - Miami Depot Facilities Maintenance $100,000 Funds not required this year as future depot plans have not been confirmed. Works will be scheduled for 2019-20 depending on outcome of future plans. These works will include repairs to existing buildings, hardstands, access and fencing.

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PB_019 Budget Review - Detail for FY 2018 - 2019

Budget Centre Element Type 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 Initial Budget Revised Budget Proposed Budget March Review March Review March Review Recurrent Non-Recurrent Total Movement Movement Movement Organisational Services

OS6910C004 - Property Rationalisation Revenue (7,500,000) (7,845,205) (7,935,940) 0 (90,735) (90,735) Expense 0 3,372,705 3,930,440 0 557,735 557,735 Net (7,500,000) (4,472,500) (4,005,500) 0 467,000 467,000 Justification: $217,000 Revenue Decrease. Sale proceeds for the property situated at 1 Paddington Place,

$200,000 Expenditure Increase. Additional funds are required for the works at Hutchinson Street, Burleigh Heads. Funds are required as a result of a contract variation due to adverse ground conditions (rock) and location of inground services that were not reflected in the available/existing drawings.

$313,160 Revenue Increase & $363,160 Expenditure Increase.

$5,425 Revenue Decrease and $5,425 Expenditure Decrease. Return of unspent funds to Infrastructure Charges Reserve. Funds held in Reserve for Scouts Association outcomes in the Gold Coast and relate to a developer contribution received in 2006 as part of the “Avalon” development in Surfers Paradise. P&DCONT, Original receipt 9422412, 3/10/2006, Project 62543.

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PB_019 Budget Review - Detail for FY 2018 - 2019

Budget Centre Element Type 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 Initial Budget Revised Budget Proposed Budget March Review March Review March Review Recurrent Non-Recurrent Total Movement Movement Movement Organisational Services

OS6970C001 - Home of the Arts - Capital Revenue 0 0 0 0 0 0 Expense 473,000 831,422 831,422 0 (0) (0) Net 473,000 831,422 831,422 0 (0) (0) Justification: Nil impact. Realignment of HOTA - Capital budgets. This transfer of budgets between capital projects is required to ensure project funding is accurately recorded. There is a nil effect on the budget from these transfers. 62511 HOTA Honeywell BMS Controller ($18,000) 62650 HOTA Main Switchboard Enclosure $18,000

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PB_019 Budget Review - Detail for FY 2018 - 2019

Budget Centre Element Type 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 Initial Budget Revised Budget Proposed Budget March Review March Review March Review Recurrent Non-Recurrent Total Movement Movement Movement Organisational Services

OS6970C003 - Building Improvements Capital Revenue 0 0 0 0 0 0 Expense 2,915,975 5,603,012 6,094,012 0 491,000 491,000 Net 2,915,975 5,603,012 6,094,012 0 491,000 491,000 Justification:

$500,000 Expenditure Increase. Additional funds are required for the final payment for the air conditioning replacement at Waterside.

($9,000) Expenditure Transfer. Realignment of Building Improvements Capital budgets. This transfer of budgets between capital projects within Property Services branch is required to ensure project funding is accurately recorded. There is a nil effect on the budget from these transfers. Refer to OS6900C002 SES Building Improvements. 62251 Karp Court Asset Renewal ($159,000) 62412 Karp Court Roof Reseal $100,000 62416 Waterside Expansion Joints ($75,000) 62350 Waterside Courtyard Renewal $75,000 62233 Waterside West Ground Floor ($190,000) 62350 Waterside Courtyard Renewal $165,000 62647 Palm Beach Admin Height Safety $16,000 62619 Karp Court Hydrant Enclosure $59,000

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PB_019 Budget Review - Detail for FY 2018 - 2019

Budget Centre Element Type 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 Initial Budget Revised Budget Proposed Budget March Review March Review March Review Recurrent Non-Recurrent Total Movement Movement Movement Organisational Services

OS7100O004 - Rating - Property Transfer Fee Revenue (1,696,400) (1,696,400) (1,843,400) 0 (147,000) (147,000) Expense 0 0 0 0 0 0 Net (1,696,400) (1,696,400) (1,843,400) 0 (147,000) (147,000) Justification: $147,000 Revenue Increase. An increasing trend in search requests assumes there will be an increase in property sales and consequently, an increase in property transfer fee revenue.

OS7180O011 - Open Space Maint & Enhancemt Sep Charge Revenue (10,947,000) (10,947,000) (11,022,000) 0 (75,000) (75,000) Expense 35,000 35,000 35,000 0 0 0 Net (10,912,000) (10,912,000) (10,987,000) 0 (75,000) (75,000) Justification: $75,000 Revenue Increase. Higher than anticipated revenue due to increased number of rateable properties.

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PB_019 Budget Review - Detail for FY 2018 - 2019

Budget Centre Element Type 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 Initial Budget Revised Budget Proposed Budget March Review March Review March Review Recurrent Non-Recurrent Total Movement Movement Movement Organisational Services

OS7180O012 - Recreational Space Separate Charge Revenue (7,743,000) (7,743,000) (7,793,000) 0 (50,000) (50,000) Expense 16,000 16,000 16,000 0 0 0 Net (7,727,000) (7,727,000) (7,777,000) 0 (50,000) (50,000) Justification: $50,000 Revenue Increase. Higher than anticipated revenue due to increased number of rateable properties.

OS7180O015 - City Transport Improvmnt Separate Charge Revenue (33,642,000) (33,642,000) (33,867,000) 0 (225,000) (225,000) Expense 62,000 62,000 62,000 0 0 0 Net (33,580,000) (33,580,000) (33,805,000) 0 (225,000) (225,000) Justification: $225,000 Revenue Increase. Higher than anticipated revenue due to increased number of rateable properties.

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PB_019 Budget Review - Detail for FY 2018 - 2019

Budget Centre Element Type 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 Initial Budget Revised Budget Proposed Budget March Review March Review March Review Recurrent Non-Recurrent Total Movement Movement Movement Organisational Services

OS7190O003 - Debt Recovery - Rates Revenue (1,615,300) (1,615,300) (615,300) 0 1,000,000 1,000,000 Expense 2,326,400 2,326,400 991,400 0 (1,335,000) (1,335,000) Net 711,100 711,100 376,100 0 (335,000) (335,000) Justification: $1,335,000 Expenditure Decrease. Delays have been experienced with commencing the advanced recovery activity for rate debt. These delays result in lower than expected expenditure being incurred this financial year.

$1,000,000 Revenue Decrease. The expenditure associated with advanced rate recovery activity is significantly lower than expected due to a delayed start to this process. As the amount of revenue is directly related to the expenditure incurred, the revenue will also be lower than expected.

OS7190O004 - Debt Recovery - Sundry Debtor Revenue (11,200) (11,200) (1,200) 0 10,000 10,000 Expense 42,200 42,200 7,200 0 (35,000) (35,000) Net 31,000 31,000 6,000 0 (25,000) (25,000) Justification: $35,000 Expenditure Decrease. There has not been the expected number of sundry debtor matters requiring advanced recovery action. Expenditure is lower than expected.

$10,000 Revenue Decrease. This revenue item is directly related to the amount of expenditure incurred in regard to legal action for sundry debtor matters. As the expenditure is lower than expected, the revenue will also be lower than expected.

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PB_019 Budget Review - Detail for FY 2018 - 2019

Budget Centre Element Type 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 Initial Budget Revised Budget Proposed Budget March Review March Review March Review Recurrent Non-Recurrent Total Movement Movement Movement Organisational Services

OS7190O008 - Bank Fees & Charges Revenue (690,500) (690,500) (690,500) 0 0 0 Expense 2,827,400 2,850,216 3,210,216 0 360,000 360,000 Net 2,136,900 2,159,716 2,519,716 0 360,000 360,000 Justification: $120,000 Expenditure Decrease. There has been a lower than expected number of payments made to Australia Post in relation to Council accounts.

$480,000 Expenditure Increase. The Commonwealth Bank implemented changes to the interchange hierarchy which determines the interchange fees charged by the credit card schemes (Visa/Mastercard). The changes significantly increased the fees payable by Council, and the scope of the increase was not fully recognised in time for the 2018-19 budget.

OS7210O001 - Customer Contact - Operations Revenue (2,684,200) (2,684,200) (2,884,200) 0 (200,000) (200,000) Expense 9,147,715 9,847,715 9,847,715 0 0 0 Net 6,463,515 7,163,515 6,963,515 0 (200,000) (200,000) Justification: $200,000 Revenue Increase. Property search fee revenue has increased due to an increasing trend in search requests.

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PB_019 Budget Review - Detail for FY 2018 - 2019

Budget Centre Element Type 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 Initial Budget Revised Budget Proposed Budget March Review March Review March Review Recurrent Non-Recurrent Total Movement Movement Movement Organisational Services

OS7560O001 - Cyber Security Operations Revenue 0 0 0 0 0 0 Expense 6,045,830 6,859,830 6,859,830 0 0 0 Net 6,045,830 6,859,830 6,859,830 0 0 0 Justification: Nil impact. Realignment of Cyber Security Operations budgets. This transfer of operational budgets within the Business Innovation & Technology Services (BITS) branch is required to ensure funding is accurately recorded. There is a nil effect on the budget from these transfers. 1002971 Cyber Resilience Project Tranche 1 ($884,000) 1007463 Threat Monitoring & Vulnerability Management $884,000

OS7800O002 - Organisational Services Administration Revenue 0 0 0 0 0 0 Expense 784,540 1,370,720 1,355,220 0 (15,500) (15,500) Net 784,540 1,370,720 1,355,220 0 (15,500) (15,500) Justification: ($15,500) Expenditure Transfer. Inter-directorate transfer to OCOO's CP&P branch as a contribution to the development of an Enterprise Project Management Methodology for business improvement projects.

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PB_019 Budget Review - Detail for FY 2018 - 2019

Budget Centre Element Type 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 Initial Budget Revised Budget Proposed Budget March Review March Review March Review Recurrent Non-Recurrent Total Movement Movement Movement Organisational Services

OS7800O004 - Cost Centre Plant Overhead Revenue 0 0 0 0 0 0 Expense 1,001,800 1,001,800 1,000,027 0 (1,773) (1,773) Net 1,001,800 1,001,800 1,000,027 0 (1,773) (1,773) Justification: ($6,147) Expenditure Transfer. Inter-directorate transfer from the Car Pool to the OCOO directorate for pro-rata plant costs relating to the transfer of a vehicle from 10/1/20 19. Equipment number 50004761.

$4,374 Expenditure Transfer. Inter-directorate transfer from OCOO for pro-rata adjustment to plant costs relating to transfer of vehicle to Car Pool. Equipment number 50004795.

OS7890O001 - Traineeship Program - State Revenue 0 (150,000) (410,000) 0 (260,000) (260,000) Expense 0 150,000 410,000 0 260,000 260,000 Net 0 0 0 0 0 0 Justification: $260,000 Revenue Increase & $260,000 Expenditure Increase. Nil impact. Skilling Queenslanders for Work is a continuing Queensland Government program that attracts subsidies to the City for employing people from the target group - school leavers and other young people, Aboriginal and Torres Strait people, people with disability, women re-entering the workforce and veterans and ex service personnel. The City can apply for subsidies of up to $26,000 per trainee with a contribution of $4000 from the business to engage a trainee for a six month period. The state provides $15,000 through its First Start initiative alongside the Australian Government subsidy of $11,000 (Work Start $10,000 and PaTH $1000). Respective directorates/branches will contribute $4000 per individual engaged from existing budgets together with other minor costs of engaging the individuals e.g. PPE. To maximise benefits to the City, it is anticipated that twenty (20) traineeship positions can be created for the City to manage multiple cohorts of trainees over the life of the program which, at this stage, ends in 2021. For 2019-20, revenue of $260,000 for government subsidies will be offset by $260,000 expenses associated with trainee wages. Other costs will be borne by the business.

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PB_019 Budget Review - Detail for FY 2018 - 2019

Budget Centre Element Type 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 Initial Budget Revised Budget Proposed Budget March Review March Review March Review Recurrent Non-Recurrent Total Movement Movement Movement Organisational Services

OS7950O006 - Online Timesheeting Revenue 0 (144,000) (866,000) 0 (722,000) (722,000) Expense 0 144,000 866,000 0 722,000 722,000 Net 0 0 0 0 0 0 Justification: $722,000 Expenditure Increase & $722,000 Revenue Increase. Nil impact. A project is currently underway to implement an online timesheeting solution (TA21) which will be integrated with our existing payroll software provided by Frontier. This additional module will attract an annual maintenance fee of $54,000 (Refer OS7960O002). Implementation is scheduled to commence in late 2019/early 2020. It is expected that these costs will be offset by savings across Council as we transition from a paper-based process to an online solution, with the financial benefits commencing in July 2021. 2018-19 funding of $144,000 was approved in the September 2018 budget review (G19.1030.014). Funded from the Investment Fund Reserve, subject to repayment via bankable benefits.

Total for Directorate: Organisational Services

Revenue (569,530,121) (578,474,014) (580,166,920) 0 (1,692,906) (1,692,906) Expense 92,827,244 129,612,867 130,938,500 0 1,325,633 1,325,633 Net (476,702,877) (448,861,147) (449,228,420) 0 (367,273) (367,273)

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PB_019 Budget Review - Detail for FY 2018 - 2019

Budget Centre Element Type 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 Initial Budget Revised Budget Proposed Budget March Review March Review March Review Recurrent Non-Recurrent Total Movement Movement Movement Transport & Infrastructure

CI2500O002 - City Assets Branch Salaries & Admin Revenue 0 0 (3,390) 0 (3,390) (3,390) Expense 1,217,965 1,217,965 1,217,965 0 0 0 Net 1,217,965 1,217,965 1,214,575 0 (3,390) (3,390) Justification: ($3,390) Revenue Increase. Recognise 50% contribution of water charges for Doug Jennings Park from Gold Coast Waterways Authority.

CI2520C004 - SWD Catchment Facility Capital Works Revenue (1,903,000) (1,903,000) (1,932,882) 0 (29,882) (29,882) Expense 16,441,539 16,570,665 16,600,547 0 29,882 29,882 Net 14,538,539 14,667,665 14,667,665 0 0 0 Justification: ($29,982) Revenue Increase, $29,982 Expenditure Increase. Return of cash retention from MacDonald Sheet Piling Pty Ltd for drainage upgrade at Boyd and Kitchener Streets, Tugun.

Intra Directorate Transfer ($1,903,000). Reallocation of Infrastructure revenue within the Program.

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PB_019 Budget Review - Detail for FY 2018 - 2019

Budget Centre Element Type 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 Initial Budget Revised Budget Proposed Budget March Review March Review March Review Recurrent Non-Recurrent Total Movement Movement Movement Transport & Infrastructure

CI2530O003 - Drainage Planning Revenue 0 0 0 0 0 0 Expense 960,840 1,110,840 1,310,840 0 200,000 200,000 Net 960,840 1,110,840 1,310,840 0 200,000 200,000 Justification: $200,000 Expenditure Increase. Savings in the Tweed River Bypassing Project (TRESBP) to be offset to complete additional stormwater drainage studies and drainage planning activities to provide for cost effective options to resolve overfloor flooding problems and guide future drainage capital works investment within the City.

CI2530O004 - Coastal Planning and Operations Revenue 0 0 0 0 0 0 Expense 8,795,161 13,981,750 13,573,889 0 (407,861) (407,861) Net 8,795,161 13,981,750 13,573,889 0 (407,861) (407,861) Justification: ($200,000) Expenditure Decrease. Savings in the Tweed River Bypassing Project (TRESBP) to be offset to complete additional stormwater drainage studies and drainage planning activities to provide for cost effective options to resolve overfloor flooding problems and guide future drainage capital works investment within the City.

($119,861) Expenditure Decrease. Sandy Beach Management is an allocation that is used for partnerships with the Gold Coast Waterways Authority to obtain clean dredged marine sand from GCWA's channel dredging projects. Savings have been identified as GCWA's dredging projects will not require full allocation from the City in the 2018-19 Financial Year.

($80,000) Expenditure Decrease. The 2018-19 Program of Works for Currumbin and Tallebudgera Creeks has been completed resulting in savings.

($8,000) Expenditure Decrease. Intra Directorate Transfer. Sponsorship for the 7th Queensland Coastal Conference to be held on the Gold Coast 21-22 August 2019. The City will provide Silver Sponsorship for the event.

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PB_019 Budget Review - Detail for FY 2018 - 2019

Budget Centre Element Type 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 Initial Budget Revised Budget Proposed Budget March Review March Review March Review Recurrent Non-Recurrent Total Movement Movement Movement Transport & Infrastructure

CI2540O002 - Transport Asset Systems Revenue 0 0 (7,215) 0 (7,215) (7,215) Expense 1,098,190 1,561,810 1,561,810 0 0 0 Net 1,098,190 1,561,810 1,554,595 0 (7,215) (7,215) Justification: ($7,215) Revenue Increase. Recognise Logan City Council contribution for SRRG Capability Funding software purchase.

CI2550O005 - Beach Facility Maintenance Revenue 0 0 0 0 0 0 Expense 2,639,305 2,639,305 2,839,166 0 199,861 199,861 Net 2,639,305 2,639,305 2,839,166 0 199,861 199,861 Justification: $119,861 Expenditure Increase. Additional funding is required for Beach Facility Maintenance in order to cover increased costs from Tropical Cyclone Oma in February 2019. The funds will be used to cover the cost of beach profiling and debris removal works that are being carried out post TC Oma.

$80,000 Expenditure Increase. Beach Facility Maintenance requires additional funding for Dune Vegetation Contracts in order to complete emergent works in the wake of Tropical Cyclone Oma. This will include restoration and revegetation works to restore eroded sections of the coastal dunes at key areas such as Narrowneck and Main Beach.

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PB_019 Budget Review - Detail for FY 2018 - 2019

Budget Centre Element Type 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 Initial Budget Revised Budget Proposed Budget March Review March Review March Review Recurrent Non-Recurrent Total Movement Movement Movement Transport & Infrastructure

CI2580C002 - Road Rehab & Reseals Revenue (7,518,000) (4,249,738) (4,268,342) 0 (18,604) (18,604) Expense 20,947,712 21,029,712 20,711,018 0 (318,694) (318,694) Net 13,429,712 16,779,974 16,442,676 0 (337,298) (337,298) Justification: (18,604) Revenue Increase. Recognise revenue from Gold Coast 2018 Commonwealth Games Corporation for Currumbin Pedestrian remediation and Currumbin Alley Carpark.

($318,694) Expenditure Decrease. Project savings have been realised in the Reseal and Rehabilitation Program for 2018-19.

CI2580C006 - Road Reconstruction Revenue (285,000) (285,000) (285,000) 0 0 0 Expense 11,777,000 11,922,000 12,240,694 0 318,694 318,694 Net 11,492,000 11,637,000 11,955,694 0 318,694 318,694 Justification: $318,694 Expenditure Increase. Funding is required for project commencement of Pearson Road early works. A condition of the Federal Government Grant funding is that construction of the project commence prior to 30 June 2019.

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PB_019 Budget Review - Detail for FY 2018 - 2019

Budget Centre Element Type 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 Initial Budget Revised Budget Proposed Budget March Review March Review March Review Recurrent Non-Recurrent Total Movement Movement Movement Transport & Infrastructure

CI2580C007 - Road Inventory Asset Renewal Revenue 0 0 0 0 0 0 Expense 205,000 205,000 255,000 0 50,000 50,000 Net 205,000 205,000 255,000 0 50,000 50,000 Justification: $50,000 Expenditure Increase. Funding transfer from Transport & Traffic Branch’s Shared Path, Tugun Bilinga Oceanway project to City Assets’ project Footpath Replacement Marine Parade, Labrador to reconstruct a path in Harley Park.

CI2580O001 - Bus Shelter Maintenance Revenue (1,014,127) (1,014,127) (1,065,818) 0 (51,691) (51,691) Expense 364,880 364,880 364,880 0 0 0 Net (649,247) (649,247) (700,938) 0 (51,691) (51,691) Justification: ($51,691) Revenue Increase. Recognise additional revenue from Australian Billboard Company for digital Bus Shelter advertising.

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PB_019 Budget Review - Detail for FY 2018 - 2019

Budget Centre Element Type 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 Initial Budget Revised Budget Proposed Budget March Review March Review March Review Recurrent Non-Recurrent Total Movement Movement Movement Transport & Infrastructure

CI2580O005 - Road Maintenance Revenue (20,000) (20,000) (139,070) 0 (119,070) (119,070) Expense 15,110,178 15,171,402 15,276,472 0 105,070 105,070 Net 15,090,178 15,151,402 15,137,402 0 (14,000) (14,000) Justification: ($14,000) Revenue Increase. Recognition of additional revenue from Energex for graffiti removal.

($105,070) Revenue Increase, $105,070 Expenditure Increase. Insurance refund for fire damage to Christmas decorations.

CI2600O002 - Urban Precincts Cleaning Revenue 0 0 (622) 0 (622) (622) Expense 2,992,765 2,992,765 2,992,765 0 0 0 Net 2,992,765 2,992,765 2,992,143 0 (622) (622) Justification: ($622) Revenue Increase. TMR Underground/Confined Space Crew for Southport Nerang Road Drain Blockage.

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PB_019 Budget Review - Detail for FY 2018 - 2019

Budget Centre Element Type 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 Initial Budget Revised Budget Proposed Budget March Review March Review March Review Recurrent Non-Recurrent Total Movement Movement Movement Transport & Infrastructure

CI3200O005 - Labour Revenue (3,340,120) (3,481,440) (3,556,940) (75,500) 0 (75,500) Expense 3,460,630 3,601,950 3,677,450 75,500 0 75,500 Net 120,510 120,510 120,510 0 0 0 Justification: ($75,500) Revenue Increase, $75,500 Expenditure Increase. Repurpose of Senior Specialist Project Manager to Coordinator Project Management Unit WOC effective from 3 December 2018.

CI3240C001 - Hard/Software & Specialist Survey Equip Revenue 0 0 (17,100) 0 (17,100) (17,100) Expense 172,800 238,927 238,927 0 0 0 Net 172,800 238,927 221,827 0 (17,100) (17,100) Justification: ($17,100) Revenue Increase. Recognition of Survey Equipment sales proceeds and trade-ins.

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PB_019 Budget Review - Detail for FY 2018 - 2019

Budget Centre Element Type 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 Initial Budget Revised Budget Proposed Budget March Review March Review March Review Recurrent Non-Recurrent Total Movement Movement Movement Transport & Infrastructure

CI3260C003 - Minor Works/Investigations-Local Area Revenue 0 (20,583) (313,560) 0 (292,977) (292,977) Expense 867,500 1,123,345 1,505,622 0 382,277 382,277 Net 867,500 1,102,762 1,192,062 0 89,300 89,300 Justification: ($270,250) Revenue Increase, $270,250 Expenditure Increase. Transfer revenue funding from reinvestment of Park in Centre Scheme (PICS) pilot parking meter revenue to Local Area Works projects for Broadbeach $57,750 (Division 10) and Burleigh Heads $212,500 (Division 12). This is in accordance with Key Action 11 of the 2015 City Parking Plan.

($22,727) Revenue Increase, $22,727 Expenditure Increase. Southport School contribution towards Lupus Street Footpath design and construction adjacent to Southport School.

$58,500 Expenditure Increase. Funding transfer of $50,000 from Transport & Traffic Branch’s Infrastructure Upgrade to support one network operations project (Lupus Street shared path) and $8,500 from Marine Parade, Len Fox Park, Labrador shared path project to Local Area Works Footpath adjustment to Southport State School project to construct a shared path.

$20,800 Expenditure Increase. Funding transfer from Transport & Traffic Branch’s Pimpama West Service Pacific Springs, Mirambeena project to Local Area Works project Path Hotham Creek Road, Pimpama to construct a shared path.

$10,000 Expenditure Increase. Funding transfer from Transport & Traffic Branch’s Whole of City Planning & Design Bus Stops to Local Area Works’ project Shared Path, Ashmore Road and Reed St, Ashmore.

CI3260C005 - Parks and Reserves - Local Area Works Revenue 0 (48,967) (63,967) 0 (15,000) (15,000) Expense 2,109,800 2,704,563 2,719,563 0 15,000 15,000

Net 2,109,800 2,655,596 2,655,596 0 0 0 Justification: (15,000) Revenue Increase, $15,000 Expenditure Increase. Contribution from Lifestyle & Community Directorate for construction of a new playground at Schusters park, Tallebudgera.

PB_019 Budget Review - Detail City of Gold Coast-IN-CONFIDENCE Page : 144 of 190 About this Report Attachment 1 Page 291

PB_019 Budget Review - Detail for FY 2018 - 2019

Budget Centre Element Type 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 Initial Budget Revised Budget Proposed Budget March Review March Review March Review Recurrent Non-Recurrent Total Movement Movement Movement Transport & Infrastructure

CI3260C007 - Community Facilities - Local Area Works Revenue 0 0 0 0 0 0 Expense 1,157,800 2,632,871 2,632,871 0 0 0 Net 1,157,800 2,632,871 2,632,871 0 0 0 Justification: Inter Directorate Transfer. $150,000 Local Area Works Division 13 and Division 14 contributions to develop a Master Plan to guide future development of the Palm Beach Aquatic Centre. LC18.1018.005.

CI3260C008 - Roadworks - Local Area Works Revenue (125,000) (168,928) (169,308) 0 (380) (380) Expense 2,821,168 9,660,759 9,734,139 0 73,380 73,380 Net 2,696,168 9,491,831 9,564,831 0 73,000 73,000 Justification: ($380) Revenue Increase, $380 Expenditure Increase. Recognition of Qleave refund for Footpath, east side of Medika Street, Runway Bay.

$63,000 Expenditure Increase. Funding transfer from Transport & Traffic Branch’s Whole of City Planning & Design Bus Stops to Local Area Works’ projects Path Morala Avenue, Runaway Bay $24,200, Path, Access Ramps & Wall, Wagawn Street, Tugun $38,800.

$10,000 Expenditure Increase. Funding transfer from Transport & Traffic Branch’s Shared Path Marine Parade Len Fox Park Labrador project to Division 10 Local Area Works Pedestrian Facility Victoria Ave Broadbeach project, to construct a pedestrian crossing on Victoria Avenue. TI18.0719.002.

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PB_019 Budget Review - Detail for FY 2018 - 2019

Budget Centre Element Type 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 Initial Budget Revised Budget Proposed Budget March Review March Review March Review Recurrent Non-Recurrent Total Movement Movement Movement Transport & Infrastructure

CI3260L001 - Home Costs - Project Management Unit Revenue 0 0 0 0 0 0 Expense (797,814) (939,134) (1,014,634) (75,500) 0 (75,500) Net (797,814) (939,134) (1,014,634) (75,500) 0 (75,500) Justification: ($75,000) Expenditure Decrease. Increase in Branch Management Overhead for new position CI343 Coordinator Project Management Unit WOC that is specific to CI3260 Project Management Unit.

CI3260L002 - Overheads - Project Management Unit Revenue 0 0 0 0 0 0 Expense 692,214 833,534 909,034 75,500 0 75,500 Net 692,214 833,534 909,034 75,500 0 75,500 Justification: $75,000 Expenditure Increase. Increase in Branch Management Overhead for new position CI343 Coordinator Project Management Unit WOC that is specific to CI3260 Project Management Unit.

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PB_019 Budget Review - Detail for FY 2018 - 2019

Budget Centre Element Type 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 Initial Budget Revised Budget Proposed Budget March Review March Review March Review Recurrent Non-Recurrent Total Movement Movement Movement Transport & Infrastructure

CI3280O001 - Internal Sales Waste Management Revenue 0 0 0 0 0 0 Expense 7,323,626 7,252,426 9,752,426 0 2,500,000 2,500,000 Net 7,323,626 7,252,426 9,752,426 0 2,500,000 2,500,000 Justification: $2,500,000 Expenditure Increase. A delay in the procurement process for the outsource of the management of TI’s construction waste has resulted in higher than anticipated internal tipping fees. A corresponding revenue increase has been recognised in Water & Waste.

CI3290C001 - Cultural Precinct Delivery Revenue (29,836,863) (40,754,695) (16,546,216) 0 24,208,479 24,208,479 Expense 29,836,863 40,566,857 16,358,378 0 (24,208,479) (24,208,479) Net 0 (187,838) (187,838) 0 0 0 Justification: $24,308,479 Revenue Decrease, ($24,308,479) Expenditure Decrease. As a result of finalisation of the Stage 2 (construction) contract of the Art Gallery, a revised cash flow has been provided by the managing contractor and therefore excess current year funding has been returned to the Cultural Precinct Reserve. Green Bridge cash flow also updated. No change to completion date to either project.

($100,000) Revenue Increase, $100,000 Expenditure Increase. Contribution from Facilities Management to the HOTA project for the relocation and installation of the existing generator from the VOS substation area to the underground car park entrance of the Chambers building.

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PB_019 Budget Review - Detail for FY 2018 - 2019

Budget Centre Element Type 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 Initial Budget Revised Budget Proposed Budget March Review March Review March Review Recurrent Non-Recurrent Total Movement Movement Movement Transport & Infrastructure

CI3350C002 - Disaster Management Unit Capital Revenue (44,200) (44,200) (75,327) 0 (31,127) (31,127) Expense 279,700 468,797 499,924 0 31,127 31,127 Net 235,500 424,597 424,597 0 0 0 Justification: ($31,127) Revenue Increase, $31,127 Expenditure Increase. Recognise revenue for disposal of old SES vehicles and Queensland Fire Emergency Services (QFES) Grant.

CI3370O001 - Parking Operations Revenue (6,741,202) (6,741,202) (7,281,702) 0 (540,500) (540,500) Expense 3,178,289 3,178,289 3,448,539 0 270,250 270,250 Net (3,562,913) (3,562,913) (3,833,163) 0 (270,250) (270,250) Justification: ($540,500) Revenue Increase, $270,250 Expenditure Increase. Recognise increase in revenue and expense representing reinvestment of Park in Centre Scheme (PICS) pilot parking meter revenue for Broadbeach $115,500 (Division 10) and Burleigh Heads $425,000 (Division 12). This is in accordance with Key Action 11 of the 2015 City Parking Plan.

Intra Directorate Transfer ($270,250). Transfer 50% revenue funding from reinvestment of Park in Centre Scheme (PICS) pilot parking meter revenue to Local Area Works projects for Broadbeach $57,750 (Division 10) and Burleigh Heads $212,500 (Division 12). This is in accordance with Key Action 11 of the 2015 City Parking Plan.

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PB_019 Budget Review - Detail for FY 2018 - 2019

Budget Centre Element Type 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 Initial Budget Revised Budget Proposed Budget March Review March Review March Review Recurrent Non-Recurrent Total Movement Movement Movement Transport & Infrastructure

CI3400O001 - Traffic Administration Revenue (453,464) (453,464) (653,464) 0 (200,000) (200,000) Expense 0 0 0 0 0 0 Net (453,464) (453,464) (653,464) 0 (200,000) (200,000) Justification: ($200,000) Revenue Increase. Increase in Temporary Road Closure revenue to recognise the continued volume of road closure applications to the end of the Financial Year.

CI3460C001 - Public Transport Infrastructure Revenue (869,500) (818,167) (818,167) 0 0 0 Expense 2,302,175 2,427,306 2,354,306 0 (73,000) (73,000) Net 1,432,675 1,609,139 1,536,139 0 (73,000) (73,000) Justification: ($73,000) Expenditure Decrease. Funding transfer from Transport & Traffic Branch’s Whole of City Planning & Design Bus Stops to Local Area Works’ projects Path Morala Avenue, Runaway Bay ($24,200), Path, Access Ramps & Wall, Wagawn Street, Tugun ($38,800), and Shared Path, Ashmore Road and Reed St, Ashmore ($10,000).

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PB_019 Budget Review - Detail for FY 2018 - 2019

Budget Centre Element Type 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 Initial Budget Revised Budget Proposed Budget March Review March Review March Review Recurrent Non-Recurrent Total Movement Movement Movement Transport & Infrastructure

CI3460C002 - Active Transport Infrastructure Revenue (3,050,000) (3,848,753) (3,848,753) 0 0 0 Expense 8,205,000 8,656,456 8,587,956 0 (68,500) (68,500) Net 5,155,000 4,807,703 4,739,203 0 (68,500) (68,500) Justification: ($50,000) Expenditure Decrease. Funding transfer from Transport & Traffic Branch’s Shared Path, Tugun Bilinga Oceanway project to City Assets’ project Footpath Replacement Marine Parade, Labrador to reconstruct a path in Harley Park.

($10,000) Expenditure Decrease. Funding transfer from Transport & Traffic Branch’s Shared Path Marine Parade Len Fox Park Labrador project to Division 10 Local Area Works Pedestrian Facility Victoria Ave Broadbeach project, to construct a pedestrian crossing on Victoria Avenue. TI18.0719.002.

($8,500) Expenditure Decrease. Funding transfer of $8,500 from Transport & Traffic Branch’s Marine Parade, Len Fox Park, Labrador shared path project to Local Area Works Footpath adjustment to Southport State School project to construct a shared path.

Intra Directorate Transfer. Reallocation of $250,000 Transport Infrastructure Development Scheme (TIDS) funding from Shared Path Gooding Drive, Merrimac project to Thrower Drive Shared Path ($125,000) and Gold Coast Highway Shared Path, Southport (eastern side between Nerang Street and Stevens Street) ($125,000).

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PB_019 Budget Review - Detail for FY 2018 - 2019

Budget Centre Element Type 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 Initial Budget Revised Budget Proposed Budget March Review March Review March Review Recurrent Non-Recurrent Total Movement Movement Movement Transport & Infrastructure

CI3460C004 - Roads Infrastructure Revenue (21,588,510) (10,057,435) (10,057,435) 0 0 0 Expense 39,047,600 30,346,180 30,389,380 0 43,200 43,200 Net 17,459,090 20,288,745 20,331,945 0 43,200 43,200 Justification: $114,000 Expenditure Increase. Transfer of funds from Traffic Signals Infrastructure Benowa Rd and Allchurch St Refurbishment Design Project to Roads Infrastructure to facilitate the provision of ITS conduit in the Old Coach Road, Reedy Creek upgrade currently underway (Old Coach Rd to Tallebudgera Creek Rd Stage 1).

($50,000) Expenditure Decrease. Funding transfer of $50,000 from Transport & Traffic Branch’s Infrastructure Upgrade to support one network operations project (Lupus Street shared path) to Local Area Works Footpath adjustment to Southport State School project to construct a shared path.

($20,800) Expenditure Decrease. Funding transfer from Transport & Traffic Branch’s Pimpama West Service Pacific Springs, Mirambeena project to Local Area Works project Path Hotham Creek Road, Pimpama to construct a shared path.

CI3460C005 - Traffic Systems Infra Revenue 0 0 0 0 0 0 Expense 2,760,000 3,248,748 3,134,748 0 (114,000) (114,000) Net 2,760,000 3,248,748 3,134,748 0 (114,000) (114,000) Justification: ($114,000) Expenditure Decrease. Transfer of funds from Traffic Signals Infrastructure Benowa Rd and Allchurch St Refurbishment Design Project to Roads Infrastructure to facilitate the provision of ITS conduit in the Old Coach Road, Reedy Creek upgrade currently underway (Old Coach Rd to Tallebudgera Creek Rd Stage 1).

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PB_019 Budget Review - Detail for FY 2018 - 2019

Budget Centre Element Type 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 Initial Budget Revised Budget Proposed Budget March Review March Review March Review Recurrent Non-Recurrent Total Movement Movement Movement Transport & Infrastructure

CI3470O004 - Roads & Data Management Revenue (925,907) (925,907) (925,907) 0 0 0 Expense 1,970,964 2,053,157 1,973,157 0 (80,000) (80,000) Net 1,045,057 1,127,250 1,047,250 0 (80,000) (80,000) Justification: ($80,000) Expenditure Decrease. Transfer of $80,000 from LGIP2 Planning to Public Transportation Light Rail to co-fund WSP’s Light Rail Impact Study, which is expected to be expanded to include the following: • Identify the local road network impacts of the latest design of GCLR Stage 3a; • Investigate potential interventions to address identified network bottlenecks; and • Undertake concept design and cost estimation for the potential road upgrades, which would be included in the Plan For Trunk Infrastructure (PFTI) for LGIP2.

CI3480O004 - Public Transportation Light Rail(NonRec) Revenue (18,000,000) (18,000,000) (18,000,000) 0 0 0 Expense 18,000,000 19,139,404 19,219,404 0 80,000 80,000 Net 0 1,139,404 1,219,404 0 80,000 80,000 Justification: $80,000 Expenditure Increase. Transfer of $80,000 from LGIP2 Planning to Public Transportation Light Rail to co-fund WSP’s Light Rail Impact Study, which is expected to be expanded to include the following: • Identify the local road network impacts of the latest design of GCLR Stage 3a; • Investigate potential interventions to address identified network bottlenecks; and • Undertake concept design and cost estimation for the potential road upgrades, which would be included in the Plan For Trunk Infrastructure (PFTI) for LGIP2.

An additional AASE Level 6 9DFN Business Engagement Officer is being added to the Gold Coast Light Rail team for the period from 1 May 2019 to 30 June 2022 to focus on business readiness and engagement for Stage 3 and has been funded within the existing budget allocation.

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PB_019 Budget Review - Detail for FY 2018 - 2019

Budget Centre Element Type 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 Initial Budget Revised Budget Proposed Budget March Review March Review March Review Recurrent Non-Recurrent Total Movement Movement Movement Transport & Infrastructure

CI3510O001 - Directors Office Labour Revenue 0 0 0 0 0 0 Expense 690,533 694,033 702,033 0 8,000 8,000 Net 690,533 694,033 702,033 0 8,000 8,000 Justification: $8,000 Expenditure Increase. Intra Directorate Transfer. Sponsorship for the 7th Queensland Coastal Conference to be held on the Gold Coast 21-22 August 2019. The City will provide Silver Sponsorship for the event.

CI3530O003 - Directorate Operating Revenue (1,900) (1,900) (5,710) 0 (3,810) (3,810) Expense 0 0 0 0 0 0 Net (1,900) (1,900) (5,710) 0 (3,810) (3,810) Justification: ($3,810) Revenue Increase. Recognise revenue from Lloyds Auctioneers and Valuers for DMU sale of miscellaneous items.

CI3570C001 - REPA works - Roads Revenue 0 0 (59,549) 0 (59,549) (59,549) Expense 0 (225,540) 0 0 225,540 225,540

Net 0 (225,540) (59,549) 0 165,991 165,991 Justification: ($59,549) Revenue Increase, $225,540 Expenditure Increase. REPA works related to Syndicate Road Tallebudgera, and Stanmore Road Luscombe and QRA revenue recognition for Syndicate Road Tallebudgera.

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PB_019 Budget Review - Detail for FY 2018 - 2019

Budget Centre Element Type 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 Initial Budget Revised Budget Proposed Budget March Review March Review March Review Recurrent Non-Recurrent Total Movement Movement Movement Transport & Infrastructure

CI3570C002 - REPA works - Bridges Revenue 0 0 (835,830) 0 (835,830) (835,830) Expense 0 412,697 1,902,868 0 1,490,171 1,490,171 Net 0 412,697 1,067,038 0 654,341 654,341 Justification: ($835,830) Revenue Increase, $1,490,171 Expenditure Increase. QRA revenue recognition and REPA works related to Alan Wilkie Bridge and REPA works related to Tallebudgera Creek Bridges # 2 and # 3.

CI3570C003 - REPA works - Landslips/Retaining Walls Revenue 0 (500,000) (522,059) 0 (22,059) (22,059) Expense 0 2,012,281 2,066,176 0 53,895 53,895 Net 0 1,512,281 1,544,117 0 31,836 31,836 Justification: ($22,059) Revenue Increase, $53,895 Expenditure Increase. QRA revenue recognition and REPA works related to 41 Mt Nimmel Road Landslip, and reallocation of $500,000 QRA revenue to Bakers Road, Numinbah Valley.

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PB_019 Budget Review - Detail for FY 2018 - 2019

Budget Centre Element Type 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 Initial Budget Revised Budget Proposed Budget March Review March Review March Review Recurrent Non-Recurrent Total Movement Movement Movement Transport & Infrastructure

CI3570C004 - REPA works - Drainage Revenue 0 0 (117,832) 0 (117,832) (117,832) Expense 0 (38,805) 57,259 0 96,064 96,064 Net 0 (38,805) (60,573) 0 (21,768) (21,768) Justification: ($117,832) Revenue Increase, $96,064 Expenditure Increase. QRA revenue recognition and REPA works related to Whiteash Road Bonogin, Nerangwood River Gauge Nerangwood, and 355 Austinville Road Austinville.

CI3570O002 - Emergent Works Revenue 0 0 (243,718) 0 (243,718) (243,718) Expense 0 0 0 0 0 0 Net 0 0 (243,718) 0 (243,718) (243,718) Justification: ($243,718) Revenue Increase. QRA revenue recognition for REPA Fire Trails.

Total for Directorate: Transport & Infrastructure

Revenue (147,714,313) (179,588,767) (158,066,144) (75,500) 21,598,123 21,522,623

Expense 398,191,665 466,870,619 447,847,996 75,500 (19,098,123) (19,022,623) Net 250,477,352 287,281,852 289,781,852 0 2,500,000 2,500,000

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PB_019 Budget Review - Detail for FY 2018 - 2019

Budget Centre Element Type 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 Initial Budget Revised Budget Proposed Budget March Review March Review March Review Recurrent Non-Recurrent Total Movement Movement Movement Water and Waste

CS4700C003 - WD - Refuse Tips - Capital Revenue (9,775,300) (8,511,300) (5,774,000) 0 2,737,300 2,737,300 Expense 9,775,300 8,511,300 5,774,000 0 (2,737,300) (2,737,300) Net 0 0 0 0 0 0 Justification: Expense - favourable $2,737,300; Revenue - unfavourable $2,737,300: The Capital Works Program for Landfills for the 2018-19 financial year has been decreased by $2.7 million (32%) at this review. Details of these movements will be addressed in the Waste Services Budget Review Report separately submitted to the Special Budget Committee.

All proposed capital works are funded from loan borrowings or Waste Services Reserve funds. The relevant funding sources have been adjusted in line with the revised program of expenditure.

CS4700C004 - WD - Transfer Stations - Capital Revenue (2,450,000) (2,064,000) (2,679,000) 0 (615,000) (615,000) Expense 2,450,000 2,064,000 2,679,000 0 615,000 615,000 Net 0 0 0 0 0 0 Justification: Expense - unfavourable $615,000; Revenue - favourable $615,000: The Capital Works Program for Waste and Recycling Centres for the 2018-19 financial year has been increased by $0.6 million (30%) at this review. Details of these movements will be addressed in the Waste Services Budget Review Report separately submitted to the Special Budget Committee.

All proposed capital works are funded from loan borrowings or Waste Services Reserve funds. The relevant funding sources have been adjusted in line with the revised program of expenditure.

PB_019 Budget Review - Detail City of Gold Coast-IN-CONFIDENCE Page : 156 of 190 About this Report Attachment 1 Page 303

PB_019 Budget Review - Detail for FY 2018 - 2019

Budget Centre Element Type 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 Initial Budget Revised Budget Proposed Budget March Review March Review March Review Recurrent Non-Recurrent Total Movement Movement Movement Water and Waste

CS4700O003 - WD - Administration Revenue 0 0 0 0 0 0 Expense 477,020 477,020 647,020 0 170,000 170,000 Net 477,020 477,020 647,020 0 170,000 170,000 Justification: Expense - unfavourable $170,000 More appropriate cost-sharing between the Landfills administration and WRC administration areas has been implemented during the year. This has resulted in higher cost allocations to disposals, offset by reduced allocations within the WRC Administration area (GW1100O001 - WRC - Management).

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PB_019 Budget Review - Detail for FY 2018 - 2019

Budget Centre Element Type 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 Initial Budget Revised Budget Proposed Budget March Review March Review March Review Recurrent Non-Recurrent Total Movement Movement Movement Water and Waste

CS4700O005 - WD - Landfill Operations Revenue (8,181,100) (8,181,100) (7,517,120) 0 663,980 663,980 Expense (7,876,478) (7,514,478) (9,745,528) 1,165,000 (3,396,050) (2,231,050) Net (16,057,578) (15,695,578) (17,262,648) 1,165,000 (2,732,070) (1,567,070) Justification: Expense - favourable $2,231,050: this net favourable movement is due to a combination of: (1) ($2,500,000) - Internal Tipping Charges being received from across the City are significantly ahead of forecast, predominantly due to the increased work program within the Transport & Infrastructure Directorate; (2) ($2,000,000) - Leachate removal costs at landfills is significantly lower than forecast, partially due to drier weather conditions, but largely as a result of approximately 50% of leachate now being disposed via the Coombabah Sewage Treatment Plant, at a much lower cost than contractual transport and disposal costs; (3) $ 2,268,950 - The recent introduction of more stringent stormwater discharge quality criteria has necessitated the procurement of additional water trucks to disperse stormwater across the landfill site, rather than discharging to the environment. Further, general operational plant hire costs are significantly higher than projected.

Revenue - unfavourable $663,980: this net unfavourable movement is due to a combination of: (1) $1,000,000 - Refuse Tipping Fees being collected at our landfills is lower than projections. Volumes of chargeable waste being taken to landfill is lower than forecast. A privately owned and operated facility has opened in close proximity to Stapylton landfill which is likely impacting volumes being disposed at Stapylton. (2) ($336,020) - Revenue has been received for the sale of carbon credits associated with the landfill gas electricity generation contract with LMS. This revenue is sporadic and cannot readily be projected.

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PB_019 Budget Review - Detail for FY 2018 - 2019

Budget Centre Element Type 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 Initial Budget Revised Budget Proposed Budget March Review March Review March Review Recurrent Non-Recurrent Total Movement Movement Movement Water and Waste

CS4700O016 - WD - Landfill Capping and Rehabilitation Revenue (250,000) (250,000) 0 0 250,000 250,000 Expense 250,000 250,000 0 0 (250,000) (250,000) Net 0 0 0 0 0 0 Justification: Expense - favourable $250,000; Revenue - unfavourable $250,000: Funding that had been included for landfill capping and remediation works at the Tugun landfill has been removed at this review, with works deferred until next financial year, pending finalisation of revised capping plan. This projected expenditure was to be funded from Waste Management Reserves. This funding allocation has also been removed at this review.

CS4700O018 - WD - Cost Centre Plant Revenue 0 0 0 0 0 0 Expense 108,500 108,500 218,500 0 110,000 110,000 Net 108,500 108,500 218,500 0 110,000 110,000 Justification: Expense - unfavourable $110,000: This budgetary increase reflects higher costs being incurred due to short-term plant hire costs for overall management and supervision requirements within the landfill operations area.

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PB_019 Budget Review - Detail for FY 2018 - 2019

Budget Centre Element Type 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 Initial Budget Revised Budget Proposed Budget March Review March Review March Review Recurrent Non-Recurrent Total Movement Movement Movement Water and Waste

CS4710O001 - WC - Administration Revenue (1,456,000) (1,456,000) (1,056,000) 0 400,000 400,000 Expense 19,642,350 19,642,350 19,642,350 0 0 0 Net 18,186,350 18,186,350 18,586,350 0 400,000 400,000 Justification: Revenue - unfavourable $400,000: This reduction in "Right for Service" revenue is due to the re-use of bins that became available as a result of the 2017-18 promotional campaign to upsize recycling bins. Re-used bins do not attract a 'right for service' payment.

CS4710O003 - WC - Recycling Service Contracts Revenue 0 0 0 0 0 0 Expense 9,256,400 9,256,400 9,616,400 360,000 0 360,000 Net 9,256,400 9,256,400 9,616,400 360,000 0 360,000 Justification: Expense - unfavourable $360,000: This increase relates to contract costs for kerbside collection of recycling bins. The CPI increases applied in accordance with current contractual arrangements have been higher than forecast when the 2018-19 budget was initially prepared. The proposed revised budget of $9.6 million reflects total anticipated costs for this service for the year.

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PB_019 Budget Review - Detail for FY 2018 - 2019

Budget Centre Element Type 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 Initial Budget Revised Budget Proposed Budget March Review March Review March Review Recurrent Non-Recurrent Total Movement Movement Movement Water and Waste

CS4710O004 - WC - Waste Service Contracts Revenue (1,000,000) (300,000) (300,000) 0 0 0 Expense 16,879,900 16,879,900 17,479,900 600,000 0 600,000 Net 15,879,900 16,579,900 17,179,900 600,000 0 600,000 Justification: Expense - unfavourable $600,000: This increase relates to contract costs for kerbside collection of general waste bins. The CPI increases applied in accordance with current contractual arrangements have been higher than forecast when the 2018-19 budget was initially prepared. The proposed revised budget of almost $17.5 million reflects total anticipated costs for this service for the year.

CS4710O006 - WC - Wheelie Bins Revenue (7,100) (7,100) (7,100) 0 0 0 Expense 2,516,200 2,516,200 1,716,200 0 (800,000) (800,000) Net 2,509,100 2,509,100 1,709,100 0 (800,000) (800,000) Justification: Expense - favourable $800,000: Projected costs for the acquisition and maintenance of wheelie bins is lower than originally forecast, predominantly due to the availability of bins for re-use following the 2017-18 promotional campaign to upsize wheelie bins. As noted above, the re-use of these bins does not attract 'right for service' payments, but reduces the cost incurred to purchase new bins when bins require replacement.

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PB_019 Budget Review - Detail for FY 2018 - 2019

Budget Centre Element Type 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 Initial Budget Revised Budget Proposed Budget March Review March Review March Review Recurrent Non-Recurrent Total Movement Movement Movement Water and Waste

CS4740N003 - WM - Income Tax Equivalent - Waste Revenue 0 0 0 0 0 0 Expense 10,442,439 10,442,439 10,408,871 0 (33,568) (33,568) Net 10,442,439 10,442,439 10,408,871 0 (33,568) (33,568) Justification: Expense - favourable $33,568: As a result of the various budgetary changes recorded as part of the March 2019 budget review, a minor decrease (less than 0.5%) in income equivalents payable to the City has been identified.

CS4740O002 - WM - Refuse Charge Revenue (84,140,000) (84,140,000) (84,265,000) 0 (125,000) (125,000) Expense 0 0 0 0 0 0 Net (84,140,000) (84,140,000) (84,265,000) 0 (125,000) (125,000) Justification: Revenue - favourable $125,000: This movement reflects an increase in interest received on outstanding waste utility charges. Debt recovery activities were expected to be enhanced this financial year, so this budget allocation was reduced as part of the initial budget preparation. This has been delayed following the implementation of the Pathway system.

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PB_019 Budget Review - Detail for FY 2018 - 2019

Budget Centre Element Type 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 Initial Budget Revised Budget Proposed Budget March Review March Review March Review Recurrent Non-Recurrent Total Movement Movement Movement Water and Waste

CS4740O003 - WM - Reserve Transfers - Waste Revenue 0 0 0 0 0 0 Expense 7,623,865 9,354,886 11,026,524 0 1,671,638 1,671,638 Net 7,623,865 9,354,886 11,026,524 0 1,671,638 1,671,638 Justification: Expense - unfavourable $1,671,638: As a result of the various budgetary changes recorded as part of the March 2019 budget review, an increase (almost 18%) in transfer to the Waste Services Reserve has been identified. This increase is predominantly due to the reduction in the capital works program, a significant proportion of which is reserve-funded.

CS4740O008 - WM - Branch Management Revenue 0 0 0 0 0 0 Expense 366,270 366,270 626,270 0 260,000 260,000 Net 366,270 366,270 626,270 0 260,000 260,000 Justification: Expense - unfavourable $260,000 This budget increase provides funding required to prepare for the implementation of the State Government Waste Disposal Levy, which takes effect from 1 July 2019. Funding provides for resourcing and external service requirements to ensure the City's systems are ready for implementation of the Levy.

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PB_019 Budget Review - Detail for FY 2018 - 2019

Budget Centre Element Type 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 Initial Budget Revised Budget Proposed Budget March Review March Review March Review Recurrent Non-Recurrent Total Movement Movement Movement Water and Waste

GW1100O001 - WRC - Management Revenue 0 0 0 0 0 0 Expense 7,431,552 8,334,052 7,464,052 (370,000) (500,000) (870,000) Net 7,431,552 8,334,052 7,464,052 (370,000) (500,000) (870,000) Justification: Expense - favourable $870,000 More appropriate cost-sharing between the Landfills administration and WRC administration areas has been implemented during the year. This has resulted in higher cost allocations to disposals, offset by reduced allocations within this budget area. More appropriate cost allocations between WRC sites has also been implemented, resulting in lower charging against this "management" area and higher costings to individual sites (eg Molendinar - GW1100O003).

Additionally, funding that was included in previous reviews for costs associated with the changeover to Protective Service Officers being engaged at WRC sites has been reduced, as some of those costs will now be deferred until next financial year.

GW1100O003 - WRC - Molendinar Waste & Recycling Centr Revenue 0 0 0 0 0 0 Expense 1,163,464 1,163,464 1,268,464 0 105,000 105,000 Net 1,163,464 1,163,464 1,268,464 0 105,000 105,000 Justification: Expense - unfavourable $105,000 More appropriate cost allocations between WRC sites has been implemented, resulting in lower charging against the "WRC Management" area (GW1100O001) and higher costings to individual sites.

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PB_019 Budget Review - Detail for FY 2018 - 2019

Budget Centre Element Type 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 Initial Budget Revised Budget Proposed Budget March Review March Review March Review Recurrent Non-Recurrent Total Movement Movement Movement Water and Waste

GW1100O004 - WRC - Merrimac Waste & Recycling Centre Revenue 0 0 0 0 0 0 Expense 324,322 628,322 428,322 (200,000) 0 (200,000) Net 324,322 628,322 428,322 (200,000) 0 (200,000) Justification: Expense - favourable $200,000 An estimate of costs to operate the newly established greenwaste pad at the Merrimac WRC was included in the September budget review. Following two months of operation of this new facility, the allocation required to operate this facility is lower than forecast and has subsequently been reduced.

GW1100O005 - WRC - Reedy Creek Waste & Recycling Cent Revenue 0 0 0 0 0 0 Expense 830,854 830,854 1,075,854 0 245,000 245,000 Net 830,854 830,854 1,075,854 0 245,000 245,000 Justification: Expense - unfavourable $245,000 More appropriate cost allocations between WRC sites has been implemented, resulting in lower charging against the "WRC Management" area (GW1100O001) and higher costings to individual sites.

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PB_019 Budget Review - Detail for FY 2018 - 2019

Budget Centre Element Type 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 Initial Budget Revised Budget Proposed Budget March Review March Review March Review Recurrent Non-Recurrent Total Movement Movement Movement Water and Waste

GW1100O009 - WRC - Minor Waste & Recycling Centre Revenue 0 0 0 0 0 0 Expense 16,500 246,500 16,500 (230,000) 0 (230,000) Net 16,500 246,500 16,500 (230,000) 0 (230,000) Justification: Expense - favourable $230,000 This allocation was included at the September budget review for operational costs associated with the newly established greenwaste pad at Coomera. At the time of that review, no specific budget area had been created for the Coomera WRC (Stage 1). A budget area has now been created and this allocation is being transferred to GW1100O012 WRC - Coomera Waste & Recycling Centre.

GW1100O010 - WRC - Resource Recovery Revenue (1,075,800) (1,075,800) (1,405,800) 0 (330,000) (330,000) Expense 1,077,100 1,077,100 1,077,100 0 0 0 Net 1,300 1,300 (328,700) 0 (330,000) (330,000) Justification: Revenue - favourable $330,000: This increased revenue projection relates to scrap steel sales. Commodity prices are slightly higher than the average last year, however the main reason for this increase is higher volumes being recovered than anticipated. Average monthly tonnages have been almost 200 tonnes higher than last year due to a combination of better resource recovery activities and higher visitor numbers.

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PB_019 Budget Review - Detail for FY 2018 - 2019

Budget Centre Element Type 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 Initial Budget Revised Budget Proposed Budget March Review March Review March Review Recurrent Non-Recurrent Total Movement Movement Movement Water and Waste

GW1100O012 - WRC - Coomera Waste & Recycling Centre Revenue 0 0 0 0 0 0 Expense 0 0 230,000 230,000 0 230,000 Net 0 0 230,000 230,000 0 230,000 Justification: Expense - unfavourable $230,000 This allocation was included at the September budget review for operational costs associated with the newly established greenwaste pad at Coomera. At the time of that review, no specific budget area had been created for the Coomera WRC (Stage 1). A budget area has now been created and this allocation is being transferred from GW1100O009 WRC - Minor Waste & Recycling Centres.

GW1120O001 - SWS - Solid Waste Strategy Revenue (125,000) (125,000) (130,000) 0 (5,000) (5,000) Expense 991,825 1,028,825 1,037,825 0 9,000 9,000 Net 866,825 903,825 907,825 0 4,000 4,000 Justification: Revenue - favourable $5,000: Revenue projections associated with the Commercial Food Waste service pilot have been revised. Due to later than anticipated commencement of this service, fees to be collected from customers has reduced by $55,000. Offsetting this reduction, the City has been successful in securing grant funding of $60,000 to assist with this pilot.

Expense - favourable $97,500: This net expenditure reduction results from changes to multiple operational projects scheduled for delivery during 2018-19. Details of these changes will be addressed in the Waste Services Budget Review Report separately submitted to the Special Budget Committee.

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PB_019 Budget Review - Detail for FY 2018 - 2019

Budget Centre Element Type 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 Initial Budget Revised Budget Proposed Budget March Review March Review March Review Recurrent Non-Recurrent Total Movement Movement Movement Water and Waste

GW2020C001 - AS-Water-Capital Works Revenue (4,195,000) (440,000) (60,000) 0 380,000 380,000 Expense 15,850,000 14,303,000 15,101,000 0 798,000 798,000 Net 11,655,000 13,863,000 15,041,000 0 1,178,000 1,178,000 Justification: Expense - unfavourable $798,000; Revenue - unfavourable $380,000: The Capital Works Program for Water for the 2018-19 financial year has been increased by $0.8 million (5.6%) at this review. Details of these movements will be addressed in the Water and Sewerage Services Budget Review Report separately submitted to the Special Budget Committee.

Infrastructure charges reserves are allocated to eligible trunk infrastructure projects. Due to the changes in the projected capital program for 2018-19, a reduction in infrastructure charges reserves funding has been identified as part of this review.

GW2020C002 - AS-Sewer-Capital Works Revenue (22,137,000) (26,100,000) (22,570,000) 0 3,530,000 3,530,000 Expense 74,888,000 76,460,000 72,446,500 0 (4,013,500) (4,013,500) Net 52,751,000 50,360,000 49,876,500 0 (483,500) (483,500) Justification: Expense - favourable $4,013,500; Revenue - unfavourable $3,530,000: The Capital Works Program for Sewer for the 2018-19 financial year has been decreased by $4.0 million (5.2%) at this review. Details of these movements will be addressed in the Water and Sewerage Services Budget Review Report separately submitted to the Special Budget Committee.

Infrastructure charges reserves are allocated to eligible trunk infrastructure projects. Due to the changes in the projected capital program for 2018-19, a reduction in infrastructure charges reserves funding has been identified as part of this review.

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PB_019 Budget Review - Detail for FY 2018 - 2019

Budget Centre Element Type 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 Initial Budget Revised Budget Proposed Budget March Review March Review March Review Recurrent Non-Recurrent Total Movement Movement Movement Water and Waste

GW2020C005 - AS-Non Core Water-Capital Works Revenue (125,000) (100,000) (2,000) 0 98,000 98,000 Expense 4,162,000 4,137,000 4,464,500 0 327,500 327,500 Net 4,037,000 4,037,000 4,462,500 0 425,500 425,500 Justification: Expense - unfavourable $327,500; Revenue - unfavourable $98,000: The Capital Works Program related to Water and Non-drinking Water metering for the 2018-19 financial year has been decreased by $0.3 million (8%) at this review. Details of these movements will be addressed in the Water and Sewerage Services Budget Review Report separately submitted to the Special Budget Committee.

Projected revenue to be received from customers for the installation of new meters has been reduced, as the City rarely undertakes this type of work on behalf of developers, following our previous policy review.

GW2020O001 - AS-Water-Operating Revenue 0 0 0 0 0 0 Expense 696,068 696,068 441,068 0 (255,000) (255,000) Net 696,068 696,068 441,068 0 (255,000) (255,000) Justification: Expense - favourable $255,000: Anticipated decommissioning costs have been reduced due to: (1) ($90,000) - reduction in expected decommissioning costs as a result of changes in the Capital Works program for the current financial year; and (2) ($165,000) - changes in scope for the Water Pump Station decommissioning project, resulting in deferral of these works to next financial year.

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PB_019 Budget Review - Detail for FY 2018 - 2019

Budget Centre Element Type 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 Initial Budget Revised Budget Proposed Budget March Review March Review March Review Recurrent Non-Recurrent Total Movement Movement Movement Water and Waste

GW2020O002 - AS-Sewer-Operating Revenue 0 0 0 0 0 0 Expense 921,466 921,466 866,466 0 (55,000) (55,000) Net 921,466 921,466 866,466 0 (55,000) (55,000) Justification: Expense - favourable $55,000: A net reduction in anticipated decommissioning costs has been identified due to: (1) $110,000 - increase in expected decommissioning costs as a result of changes in the Capital Works program for the current financial year; and (2) ($165,000) - changes in scope for the Sewer Pump Station decommissioning project, resulting in deferral of these works to next financial year.

GW2030O001 - NR-Water-Operating Revenue 0 0 0 0 0 0 Expense 1,775,335 1,847,335 1,744,835 0 (102,500) (102,500) Net 1,775,335 1,847,335 1,744,835 0 (102,500) (102,500) Justification: Expense - favourable $102,500: This net expenditure reduction results from changes to multiple operational projects being delivered within this budget area. Details of these changes will be addressed in the Water and Sewerage Services Budget Review Report separately submitted to the Special Budget Committee.

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PB_019 Budget Review - Detail for FY 2018 - 2019

Budget Centre Element Type 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 Initial Budget Revised Budget Proposed Budget March Review March Review March Review Recurrent Non-Recurrent Total Movement Movement Movement Water and Waste

GW2030O002 - NR-Sewer-Operating Revenue 0 0 0 0 0 0 Expense 3,552,635 3,531,635 2,890,635 0 (641,000) (641,000) Net 3,552,635 3,531,635 2,890,635 0 (641,000) (641,000) Justification: Expense - favourable $641,000: This net expenditure reduction results from changes to multiple operational projects being delivered within this budget area. Details of these changes will be addressed in the Water and Sewerage Services Budget Review Report separately submitted to the Special Budget Committee.

GW2040O001 - NC-Water-Operating Revenue 0 (75,000) 0 0 75,000 75,000 Expense 0 252,500 122,000 0 (130,500) (130,500) Net 0 177,500 122,000 0 (55,500) (55,500) Justification: Revenue - unfavourable $75,000; Expense - favourable $130,500: These movements relate to defect rectification works associated with the Southport-Burleigh Road upgrade project being delivered by Transport & Main Roads (TMR). Only minor defect rectification works are required for the remainder of this financial year, with both expense and reimbursement estimates being adjusted accordingly.

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PB_019 Budget Review - Detail for FY 2018 - 2019

Budget Centre Element Type 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 Initial Budget Revised Budget Proposed Budget March Review March Review March Review Recurrent Non-Recurrent Total Movement Movement Movement Water and Waste

GW2050O001 - Mmac STP-Sewer-Operating Revenue 0 0 0 0 0 0 Expense 6,059,149 6,059,149 6,159,149 0 100,000 100,000 Net 6,059,149 6,059,149 6,159,149 0 100,000 100,000 Justification: Expense - unfavourable $100,000: Electricity Charges across the Water and Sewerage business are below forecast, due to lower than expected price increases. Consumption at the Merrimac STP is higher than original projections, due to increased flows, with the allocation for this STP being increased slightly.

GW2070O001 - Cmbbah STP-Sewer-Operating Revenue 0 0 0 0 0 0 Expense 9,627,621 9,627,621 9,527,621 0 (100,000) (100,000) Net 9,627,621 9,627,621 9,527,621 0 (100,000) (100,000) Justification: Expense - favourable $100,000: Electricity Charges across the Water and Sewerage business are below forecast, due to lower than expected price increases. The allocation provided for Coombabah STP has been reduced as a result of the lower than expected pricing.

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PB_019 Budget Review - Detail for FY 2018 - 2019

Budget Centre Element Type 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 Initial Budget Revised Budget Proposed Budget March Review March Review March Review Recurrent Non-Recurrent Total Movement Movement Movement Water and Waste

GW2080O001 - Pimpama STP-Sewer-Operating Revenue 0 0 0 0 0 0 Expense 2,806,993 2,806,993 2,706,993 0 (100,000) (100,000) Net 2,806,993 2,806,993 2,706,993 0 (100,000) (100,000) Justification: Expense - favourable $100,000: Electricity Charges across the Water and Sewerage business are below forecast, due to lower than expected price increases. The allocation provided for Pimpama STP has been reduced as a result of the lower than expected pricing.

GW2100O001 - Wkshp-Unallocated Water Services - Ops Revenue 0 0 0 0 0 0 Expense 550,934 550,934 490,934 0 (60,000) (60,000) Net 550,934 550,934 490,934 0 (60,000) (60,000) Justification: Expense - favourable $60,000: An overall reduction in Workshop overhead costs has been identified as part of this review. This is predominantly the result of major repair and rehabilitation works being undertaken internally, the costs for which are capitalised, rather than treated as an operational expense.

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PB_019 Budget Review - Detail for FY 2018 - 2019

Budget Centre Element Type 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 Initial Budget Revised Budget Proposed Budget March Review March Review March Review Recurrent Non-Recurrent Total Movement Movement Movement Water and Waste

GW2100O002 - Wkshp - Sewer - Operating Revenue 0 0 0 0 0 0 Expense 1,635,930 1,635,930 1,395,930 0 (240,000) (240,000) Net 1,635,930 1,635,930 1,395,930 0 (240,000) (240,000) Justification: Expense - favourable $240,000: An overall reduction in Workshop overhead costs has been identified as part of this review. This is predominantly the result of major repair and rehabilitation works being undertaken internally, the costs for which are capitalised, rather than treated as an operational expense.

GW2110I003 - BP-Competitive Neutrality Tax Revenue 0 0 0 0 0 0 Expense 40,899,274 40,899,274 40,324,391 0 (574,883) (574,883) Net 40,899,274 40,899,274 40,324,391 0 (574,883) (574,883) Justification: Expense - favourable $574,883: As a result of the various budgetary changes recorded throughout the financial year, a minor decrease (less than 1.5%) in income equivalents payable to the City has been identified.

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PB_019 Budget Review - Detail for FY 2018 - 2019

Budget Centre Element Type 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 Initial Budget Revised Budget Proposed Budget March Review March Review March Review Recurrent Non-Recurrent Total Movement Movement Movement Water and Waste

GW2110O001 - BP-Water-Operating Revenue (295,240,645) (297,824,813) (298,644,813) 0 (820,000) (820,000) Expense 185,922,676 184,658,325 182,441,863 0 (2,216,462) (2,216,462) Net (109,317,969) (113,166,488) (116,202,950) 0 (3,036,462) (3,036,462) Justification: Revenue - favourable $820,000; Expense - favourable $2,216,462: This revenue increase is the result of: (1) $520,000 - increase in Interest on Outstanding Water Rates and Charges - debt recovery activities were expected to be enhanced this financial year, so this budget allocation was reduced as part of the initial budget preparation. This has been delayed following the implementation of the Pathway system; and (2) $300,000 - budget allocation provided for Concealed Leakage Remissions has been reduced, based on current remission levels and projected total remissions to be applied for the year. A total allocation of $2.5 million was provided for both water and sewerage remissions as part of the initial budget. This overall allocation is being reduced by $400,000 at this review ($300,000 water / $100,000 sewer).

This expense decrease relates to the anticipated year-end transfer of cash surplus to reserves. As a result of movements processed within this review, particularly the reduction in Infrastructure Charges Reserve funding for the revised Capital Works Program, the estimated value to be transferred to reserve at year has reduced.

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PB_019 Budget Review - Detail for FY 2018 - 2019

Budget Centre Element Type 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 Initial Budget Revised Budget Proposed Budget March Review March Review March Review Recurrent Non-Recurrent Total Movement Movement Movement Water and Waste

GW2110O002 - BP-Sewerage-Operating Revenue (225,843,270) (230,437,348) (231,017,348) 0 (580,000) (580,000) Expense 12,200,925 18,105,578 20,758,923 0 2,653,345 2,653,345 Net (213,642,345) (212,331,770) (210,258,425) 0 2,073,345 2,073,345 Justification: Revenue - favourable $580,000: This revenue increase is the result of: (1) $480,000 - increase in Interest on Outstanding Sewerage Rates and Charges - debt recovery activities were expected to be enhanced this financial year, so this budget allocation was reduced as part of the initial budget preparation. This has been delayed following the implementation of the Pathway system; and (2) $100,000 - budget allocation provided for Concealed Leakage Remissions has been reduced, based on current remission levels and projected total remissions to be applied for the year. A total allocation of $2.5 million was provided for both water and sewerage remissions as part of the initial budget. This overall allocation is being reduced by $400,000 at this review ($300,000 water / $100,000 sewer).

Expense - unfavourable $2,653,345: This increase in expense is the result of: (1) $350,000 - The terms of the City's service level agreement with Logan City Council provide for the City to be levied 'over limit' charges based around both the quantity and quality of wastewater discharged to the Beenleigh sewage treatment plant. A charged was levied by Logan City Council for the September - December 2018 quarter and, whilst work is ongoing within the City's Source Control section to actively identify, monitor and encourage customers to address these issues, it is considered prudent to provide for the potential that further 'over limit' charges may incurred this financial year; and (2) $2,303,345 - Increase in reserve transfers - this relates to the anticipated year-end transfer of cash surplus to reserves. As a result of movements processed within this review, particularly the reduction in the sewer-related Capital Works Program, the estimated value to be transferred to reserve at year end has increased.

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PB_019 Budget Review - Detail for FY 2018 - 2019

Budget Centre Element Type 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 Initial Budget Revised Budget Proposed Budget March Review March Review March Review Recurrent Non-Recurrent Total Movement Movement Movement Water and Waste

GW2110O003 - BP-Unallocated Water Services-Operating Revenue 0 0 0 0 0 0 Expense 8,909,560 10,549,130 10,875,130 0 326,000 326,000 Net 8,909,560 10,549,130 10,875,130 0 326,000 326,000 Justification: Expense - unfavourable $326,000: This net expenditure increase results from changes to multiple operational projects being delivered within this budget area. Details of these changes will be addressed in the Water and Sewerage Services Budget Review Report separately submitted to the Special Budget Committee.

GW2110O004 - BP-Recycled Water-Operating Revenue (971,700) (971,700) (730,700) 0 241,000 241,000 Expense 0 0 0 0 0 0 Net (971,700) (971,700) (730,700) 0 241,000 241,000 Justification: Revenue - unfavourable $241,000: Revenue projections from non-drinking water sales are being reduced to reflect actual revenues being received from this source.

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PB_019 Budget Review - Detail for FY 2018 - 2019

Budget Centre Element Type 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 Initial Budget Revised Budget Proposed Budget March Review March Review March Review Recurrent Non-Recurrent Total Movement Movement Movement Water and Waste

GW2140O002 - DS-Unallocated Sewer Services-Operating Revenue 0 0 0 0 0 0 Expense 50,000 173,000 252,000 0 79,000 79,000 Net 50,000 173,000 252,000 0 79,000 79,000 Justification: Expense - unfavourable $79,000: This budgetary increase provides for higher curator costs associated with Urban Artwork project to enhance the aesthetic appeal of Water and Waste facilities throughout the City.

GW2140O003 - DS–Unallocated Operating Revenue 0 0 0 0 0 0 Expense 3,317,120 3,415,120 3,417,120 0 2,000 2,000 Net 3,317,120 3,415,120 3,417,120 0 2,000 2,000 Justification: Expense - unfavourable $2,000: This minor increase is required for costs associated with the Gold Coast Tap Water Marketing program.

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PB_019 Budget Review - Detail for FY 2018 - 2019

Budget Centre Element Type 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 Initial Budget Revised Budget Proposed Budget March Review March Review March Review Recurrent Non-Recurrent Total Movement Movement Movement Water and Waste

GW2150O001 - WPS-Water-Operating Revenue 0 0 0 0 0 0 Expense 762,207 762,207 712,207 0 (50,000) (50,000) Net 762,207 762,207 712,207 0 (50,000) (50,000) Justification: Expense - favourable $50,000: This funding is being transferred to Sewer Pump Station maintenance and operations to appropriately reflect the water / sewer split of this maintenance budget.

GW2160O001 - SPS-Sewer-Operating Revenue 0 0 0 0 0 0 Expense 5,771,375 5,771,375 5,821,375 0 50,000 50,000 Net 5,771,375 5,771,375 5,821,375 0 50,000 50,000 Justification: Expense - unfavourable $50,000: This funding is being transferred from Water Pump Station maintenance and operations to appropriately reflect the water / sewer split of this maintenance budget.

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PB_019 Budget Review - Detail for FY 2018 - 2019

Budget Centre Element Type 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 Initial Budget Revised Budget Proposed Budget March Review March Review March Review Recurrent Non-Recurrent Total Movement Movement Movement Water and Waste

GW2170O001 - Rsvr-Water-Operating Revenue 0 0 0 0 0 0 Expense 384,014 384,014 484,014 0 100,000 100,000 Net 384,014 384,014 484,014 0 100,000 100,000 Justification: Expense - unfavourable $100,000: This increased funding is required to cover tank cleaning costs and unexpected costs for removal of trees. Future year budgets will need to be adjusted for increased tank cleaning costs.

GW2190O001 - NO-Water-Operating Revenue 0 0 0 0 0 0 Expense 3,469,836 3,525,800 3,275,800 0 (250,000) (250,000) Net 3,469,836 3,525,800 3,275,800 0 (250,000) (250,000) Justification: Expense - favourable $250,000: Electricity Charges across the Water and Sewerage business are below forecast, due to lower than expected price increases. The allocation provided for Water Network Operations has been reduced as a result of the lower than expected pricing.

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PB_019 Budget Review - Detail for FY 2018 - 2019

Budget Centre Element Type 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 Initial Budget Revised Budget Proposed Budget March Review March Review March Review Recurrent Non-Recurrent Total Movement Movement Movement Water and Waste

GW2190O002 - NO-Sewer-Operating Revenue 0 0 0 0 0 0 Expense 7,223,313 7,239,593 7,001,593 0 (238,000) (238,000) Net 7,223,313 7,239,593 7,001,593 0 (238,000) (238,000) Justification: Expense - favourable $238,000: Electricity Charges across the Water and Sewerage business are below forecast, due to lower than expected price increases. The allocation provided for Sewer Network Operations has been reduced as a result of the lower than expected pricing.

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PB_019 Budget Review - Detail for FY 2018 - 2019

Budget Centre Element Type 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 Initial Budget Revised Budget Proposed Budget March Review March Review March Review Recurrent Non-Recurrent Total Movement Movement Movement Water and Waste

GW2200O001 - NM-Water-Operating Revenue 0 0 0 0 0 0 Expense 12,294,437 12,294,437 14,594,437 0 2,300,000 2,300,000 Net 12,294,437 12,294,437 14,594,437 0 2,300,000 2,300,000 Justification: Expense - unfavourable $2,300,000: Changes to both regulations and the operating environment have contributed to increased maintenance costs for the City's water reticulation system in recent years. The main drivers contributing to this cost increase are: - Change in classification from capital to operating expenditure - pipe replacements less than 8 meters in length are now considered to be repairs & maintenance, which results in all main breaks under driveways being treated as maintenance costs - Increased prevalence of concrete footpaths resulting requirement for concrete cutting and replacement - Changes to specifications for road restoration requiring the keying in of the substrata, which doubles the width of the trench and significantly increases the cost of restoration - Due to the use of shut-off clamps on poly pipe by previous meter replacement contractors, increased pipe failures in front of meters is being experienced. Push on plastic fittings are also failing. - Increase in larger trunk main leaks - as the older trunk mains approach the end of their economic life, the incidence of leaks on these mains has increased - Increased levels of customer focus requiring water tankers to supply residents or businesses and carrying out work after hours to commercial areas to reduce impact on businesses - Water loss leak survey program enhancing identification of possible leaks and increasing costs to investigate / repair - Increase in the asset base with major development of the northern corridor. Dual reticulation doubles the amount of assets in an area, new areas suffer failures due to poor workmanship or impact of landscape & construction works - With the major focus on safety improvements the costs impacts must be recognised - service locations, Dial Before You Dig, increased use of vacuum trucks, increased concrete cutting costs, increased traffic control usage, shift changeovers, increased cost of tools and equipment - all contribute to higher maintenance costs - Brownfield development construction activity impacting our assets and contributing to main breaks, along with increased utility works with NBN and roadworks.

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PB_019 Budget Review - Detail for FY 2018 - 2019

Budget Centre Element Type 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 Initial Budget Revised Budget Proposed Budget March Review March Review March Review Recurrent Non-Recurrent Total Movement Movement Movement Water and Waste

GW2200O002 - NM-Sewer-Operating Revenue 0 0 0 0 0 0 Expense 8,491,927 8,491,927 7,991,927 0 (500,000) (500,000) Net 8,491,927 8,491,927 7,991,927 0 (500,000) (500,000) Justification: Expense - favourable $500,000: Savings have been identified within the Sewer Reticulation maintenance budget, which partially offsets the higher than projected maintenance costs within the Water Reticulation system budget. This is the result of fewer incidents with the sewer system being experienced this year.

GW2210O001 - PMQ-Water-Operating Revenue 0 0 0 0 0 0 Expense 1,057,929 1,057,929 957,929 0 (100,000) (100,000) Net 1,057,929 1,057,929 957,929 0 (100,000) (100,000) Justification: Expense - favourable $100,000: Due to staff vacancies, a saving in labour budget for this section has been identified as part of this review.

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PB_019 Budget Review - Detail for FY 2018 - 2019

Budget Centre Element Type 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 Initial Budget Revised Budget Proposed Budget March Review March Review March Review Recurrent Non-Recurrent Total Movement Movement Movement Water and Waste

GW2210O002 - PMQ-Sewer-Operating Revenue 0 0 0 0 0 0 Expense 546,065 536,065 474,065 0 (62,000) (62,000) Net 546,065 536,065 474,065 0 (62,000) (62,000) Justification: Expense - favourable $62,000: Operational project allocation for Aeration Upgrade Planning at the Elanora Sewage Treatment Plant is no longer required in the current financial year, with this body of work deferred pending completion of LGIP 2 network modelling.

GW2220O001 - CM - Customer Management (Water) Revenue 0 0 0 0 0 0 Expense 1,575,425 1,575,425 2,185,425 0 610,000 610,000 Net 1,575,425 1,575,425 2,185,425 0 610,000 610,000 Justification: Expense - unfavourable $610,000: Continuous billing is to be implemented for Water and Sewerage utility charging with effect from 1 July 2019. Significant efforts will be focussed around communication with residents and ratepayers to understand the impact of this proposal. It is anticipated there may be customer confusion due to the relative complexities associated with the transition to continuous billing which will place substantial impost on the City's Customer Contact Centre to respond to customer enquiries. To ensure the City is prepared to address these potential issues, it is proposed to establish a temporary, dedicated "Continuous Billing Campaign Work Group / Queue" within the Customer Contact Centre, comprising a total of 35 temporary staff for a maximum period of six months. It is proposed to recruit these staff during May 2019 to enable sufficient time for training and skill consolidation, prior to the issue of the July 2019 water and sewerage bills. The total estimated cost of this proposal is almost $1.3 million. This increase provides for the costs expected to be incurred in the current financial year for this undertaking, plus an additional $160,000 for targeted customer communications including change management resourcing, bill inserts, flyers and other communications activities aimed at minimising customer impacts associated with this significant change.

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PB_019 Budget Review - Detail for FY 2018 - 2019

Budget Centre Element Type 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 Initial Budget Revised Budget Proposed Budget March Review March Review March Review Recurrent Non-Recurrent Total Movement Movement Movement Water and Waste

GW2230O001 - CC - Customer Connections (Water) Revenue (1,580,300) (1,580,300) (1,580,300) 0 0 0 Expense 1,845,646 1,870,020 1,466,020 0 (404,000) (404,000) Net 265,346 289,720 (114,280) 0 (404,000) (404,000) Justification: Expense - favourable $404,000: This net expenditure decrease results from a combination of: (1) Labour savings due to vacancies within this section ($275,000); and (2) Changes to multiple operational projects being delivered within this budget area ($129,000). Details of these changes will be addressed in the Water and Sewerage Services Budget Review Report separately submitted to the Special Budget Committee.

GW2230O002 - CC - Customer Connections (Sewer) Revenue (721,000) (721,000) (407,500) 0 313,500 313,500 Expense 1,357,510 1,357,510 949,010 0 (408,500) (408,500) Net 636,510 636,510 541,510 0 (95,000) (95,000) Justification: Revenue - unfavourable $313,500: This unfavourable variance is due to reduction in septic and sullage revenues being collected from the Calypso Bay area. Calypso Bay has now been connected to the City's sewerage reticulation system with septic and sullage charges no longer being collected from the area.

Expense - favourable $408,500: This favourable variance is due to a combination of: (1) Leachate disposal charges (recorded as a negative expense) being received from the Waste Disposal area for leachate treatment at the Coombabah sewerage treatment plant; and (2) Labour savings due to vacancies within this section.

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PB_019 Budget Review - Detail for FY 2018 - 2019

Budget Centre Element Type 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 Initial Budget Revised Budget Proposed Budget March Review March Review March Review Recurrent Non-Recurrent Total Movement Movement Movement Water and Waste

GW2240O005 - SS - Scientific Services Revenue (465,000) (465,000) (465,000) 0 0 0 Expense 191,785 130,285 431,785 0 301,500 301,500 Net (273,215) (334,715) (33,215) 0 301,500 301,500 Justification: Expense - unfavourable $301,500: This budget movement reflects a reduction in internal laboratory fees being received for testing undertaken for various parts of Council. Budget projections recorded in the initial budget were inflated as a result of increased testing and monitoring that was being undertaken in the lead-up to Commonwealth Games. This change better reflects the expected year-end position for these internal revenues (recorded as negative expenses).

GW2260O001 - DS - Water - Operational Costs Revenue (525,000) (525,000) (625,000) 0 (100,000) (100,000) Expense 1,742,106 1,744,606 1,844,606 0 100,000 100,000 Net 1,217,106 1,219,606 1,219,606 0 0 0 Justification: Expense - unfavourable $100,000; Revenue - favourable $100,000: This movement reflects an increase in developer reimbursements to be made for water infrastructure. The initial budget recorded an estimate of $100,000 for proposed reimbursements in 2018-19, with such reimbursements to be funded from infrastructure charges reserves. A payment of just in excess of $200,000 will be made this year, with both expense and revenue budget allocations increased accordingly.

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PB_019 Budget Review - Detail for FY 2018 - 2019

Budget Centre Element Type 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 Initial Budget Revised Budget Proposed Budget March Review March Review March Review Recurrent Non-Recurrent Total Movement Movement Movement Water and Waste

GW2260O002 - DS - Sewer - Operational Costs Revenue (720,000) (720,000) (520,000) 0 200,000 200,000 Expense 1,843,444 1,845,944 1,545,944 0 (300,000) (300,000) Net 1,123,444 1,125,944 1,025,944 0 (100,000) (100,000) Justification: Revenue - unfavourable $200,000; Expense - favourable $300,000: This movement reflects a combination of: (1) a decrease in developer reimbursements to be made for sewer infrastructure. The initial budget recorded an estimate of $500,000 for proposed reimbursements in 2018-19, with such reimbursements to be funded from infrastructure charges reserves. A payment of just in excess of $200,000 will be made this year, with both expense and revenue budget allocations being decreased accordingly; and (2) an increase of $100,000 in revenues associated with applications for connection to the City's sewer reticulation system. Applications for connection to the sewerage system associated with new developments has exceeded initial projections for the year.

GW2270O001 - IWP - Water - Operating Revenue (35,000) (35,000) (35,000) 0 0 0 Expense 2,302,320 2,337,320 2,153,820 0 (183,500) (183,500) Net 2,267,320 2,302,320 2,118,820 0 (183,500) (183,500) Justification: Expense - favourable $183,500: This budget reduction is due to a combination of: (1) Labour savings ($70,000) due to staff vacancies during the year; and (2) Changes to multiple operational projects being delivered within this budget area ($113,500). Details of these changes will be addressed in the Water and Sewerage Services Budget Review Report separately submitted to the Special Budget Committee.

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PB_019 Budget Review - Detail for FY 2018 - 2019

Budget Centre Element Type 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 Initial Budget Revised Budget Proposed Budget March Review March Review March Review Recurrent Non-Recurrent Total Movement Movement Movement Water and Waste

GW2280O002 - AIP - Sewer - Operating Revenue 0 0 0 0 0 0 Expense 50,000 116,000 110,500 0 (5,500) (5,500) Net 50,000 116,000 110,500 0 (5,500) (5,500) Justification: Expense - favourable $5,500: This minor saving results from the completion of the City Plan Holding Capacity study at a lower cost than anticipated.

GW2280O003 - AIP – Unallocated – Operating Revenue 0 0 0 0 0 0 Expense 966,010 1,157,010 1,484,510 0 327,500 327,500 Net 966,010 1,157,010 1,484,510 0 327,500 327,500 Justification: Expense - unfavourable $327,500: This increased budget provides for: (1) Labour costs associated with a new Executive Coordinator position created within this area and specialist resourcing engaged to facilitate finalisation of the City's new Water Strategy and prepare scope for the upcoming review of the City's Solid Waste Strategy ($265,000); (2) Increased modelling requirements associated with the LGIP2 Infrastructure Planning project ($12,500); and (3) The inclusion of two new operational projects addressing a Review of Citywide Erosion and Sediment Control ($20,000) and Springbrook Groundwater study ($30,000) which both deliver on the City's proposed new Water Strategy.

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PB_019 Budget Review - Detail for FY 2018 - 2019

Budget Centre Element Type 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 Initial Budget Revised Budget Proposed Budget March Review March Review March Review Recurrent Non-Recurrent Total Movement Movement Movement Water and Waste

GW2290O001 - SCP - Sewer - Operating Revenue 0 0 0 0 0 0 Expense 1,986,000 2,305,000 1,876,500 0 (428,500) (428,500) Net 1,986,000 2,305,000 1,876,500 0 (428,500) (428,500) Justification: Expense - favourable $428,500: This budget reduction comprises a combination of: (1) Labour savings within this section ($255,000) which has been utilised to fund the new Executive Coordinator role within the Asset Investment Program (GW2280O003); and (2) Changes to multiple operational projects being delivered within this budget area ($173,500). Details of these changes will be addressed in the Water and Sewerage Services Budget Review Report separately submitted to the Special Budget Committee.

GW2300O001 - WMP - Operations Revenue 0 0 0 0 0 0 Expense 426,830 529,830 536,330 0 6,500 6,500 Net 426,830 529,830 536,330 0 6,500 6,500 Justification: Expense - unfavourable $6,500: This minor reduction results from changes to Operational Project requirements as set out below: (1) Solid Waste Infrastructure Planning program - increased by $43,000 to include Landfill Volumetric Survey for the Molendinar Landfill site and additional resourcing to manage this body of work; (2) WRC Environmental Compliance - reduced by $9,500 due to the cancellation of acoustic assessment report and conceptual design for the Suntown landfill greenwaste pad; and (3) WRC Network Infrastructure Review - reduced by $27,000 as this project has now been completed at a lower cost than anticipated.

Total for Directorate: Water and Waste

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PB_019 Budget Review - Detail for FY 2018 - 2019

Budget Centre Element Type 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 2018 - 2019 Initial Budget Revised Budget Proposed Budget March Review March Review March Review Recurrent Non-Recurrent Total Movement Movement Movement Water and Waste Revenue (662,639,715) (671,205,350) (664,891,570) 0 6,313,780 6,313,780 Expense 662,639,715 671,205,350 664,891,570 1,555,000 (7,868,780) (6,313,780) Net 0 0 0 1,555,000 (1,555,000) 0

Note: The Revised and Proposed Budget represents the Current Revised Budget and not the budget of any prior review being reported.

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ITEM 6 OFFICE OF THE CHIEF EXECUTIVE OFFICER CONFIDENTIALITY OF 2019-20 BUDGET DOCUMENTS FN334/375/21(P1)

RECOMMENDATION

That all budget documentation be deemed non-confidential except for those parts deemed by the Chief Executive Officer to remain confidential in accordance with section 171 (3) and 200 (5) of the Local Government Act 2009.

COMMITTEE RECOMMENDATION SBF19.0513.006 moved Cr Owen-Jones seconded Cr Vorster

That all budget documentation be deemed non-confidential except for those parts deemed by the Chief Executive Officer to remain confidential in accordance with section 171 (3) and 200 (5) of the Local Government Act 2009.

CARRIED UNANIMOUSLY

773rd Council Meeting 14 May 2019 338 Special Budget & Finance Committee Meeting 13 May 2019 Adopted Report

ITEM 7 OFFICE OF THE CHIEF OPERATING OFFICER EXTERNAL PRESENTATION (2019-20 BUDGET) FN334/375/21(P1)

Conflict of Interest – Cr Vorster Pursuant to section 175E(2) of the Local Government Act 2009, I would like to inform the meeting that I have a personal interest in this matter, which I recognise may be a real or perceived conflict of interest the particulars of which are as follows: The nature of the interest is: My wife is employed by a member of Study Gold Coast The name of the person or entity is: Melissa Vorster The nature of the relationship is: Melissa Vorster is employed by Bond University The value of the gift is: Nil The date of receipt of the gift is: Nil The nature of the other person’s interest in the matter is: Bond University which is a member of Study Gold Coast However I have considered my position and my interest in this matter as just described, and am firmly of the view that I may participate in the meeting and vote in respect of this matter in the public interest for the reason that it is remote in nature.

PROCEDURAL MOTION moved Cr Tozer seconded Cr Peter Young Pursuant to section 175E(4)(a) of the Local Government Act 2009, Council resolves that: Cr Vorster has a perceived conflict of interest in this matter because of the reasons disclosed in his declaration.

CARRIED

In accordance with Section 175E(4) of the Local Government Act 2009, Cr Vorster and Cr Caldwell did not vote.

PROCEDURAL MOTION moved Cr Tozer seconded Cr Gates Pursuant to section 175E(4)(b) of the Local Government Act 2009, Council resolves that: Cr Vorster may participate in the meeting and vote on the matter because the interest as disclosed is of a remote and minor nature.

CARRIED

In accordance with Section 175E(4) of the Local Government Act 2009, Cr Vorster and Cr Caldwell did not vote.

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ITEM 7 (Continued) EXTERNAL PRESENTATION (2019-20 BUDGET) FN334/375/21(P1)

Conflict of Interest – Cr Caldwell Pursuant to section 175E(2) of the Local Government Act 2009, I would like to inform the meeting that I have a personal interest in this matter, which I recognise may be a real or perceived conflict of interest the particulars of which are as follows: The nature of the interest is: Council’s appointed representative to be on The Board of Study Gold Coast The name of the person or entity is: Study Gold Coast The nature of the relationship is: Council’s representative to The Board of Study Gold Coast The value of the gift is: Nil The date of receipt of the gift is: Nil The nature of the other person’s interest in the matter is: Council’s appointed representative to be on The Board of Study Gold Coast However I have considered my position and my interest in this matter as just described, and am firmly of the view that I may participate in the meeting and vote in respect of this matter in the public interest for the reason that is in the best interest of the public as Council’s appointed representative to be on The Board of Study Gold Coast.

PROCEDURAL MOTION moved Cr Tozer seconded Cr PJ Young Pursuant to section 175E(4)(a) of the Local Government Act 2009, Council resolves that: Cr Caldwell, being Council’s appointed Board Member of Study Gold Coast, does not have a conflict of interest in this matter.

CARRIED

In accordance with Section 175E(4) of the Local Government Act 2009, Cr Caldwell and Cr Vorster did not vote.

773rd Council Meeting 14 May 2019 340 Special Budget & Finance Committee Meeting 13 May 2019 Adopted Report

ITEM 7 (Continued) EXTERNAL PRESENTATION (2019-20 BUDGET) FN334/375/21(P1)

Conflict of Interest – Cr Gates Pursuant to section 175E(2) of the Local Government Act 2009, I would like to inform the meeting that I have a personal interest in this matter, which I recognise may be a real or perceived conflict of interest the particulars of which are as follows: The nature of the interest is: Daughter-in-law’s Sister is employed by Study Gold Coast The name of the person or entity is: Daughter-in-law’s Sister The nature of the relationship is: Employed by Study Gold Coast The value of the gift is: Nil The date of receipt of the gift is: Nil The nature of the other person’s interest in the matter is: Study Gold Coast seeking funding from Council. However I have considered my position and my interest in this matter as just described, and am firmly of the view that I may participate in the meeting and vote in respect of this matter in the public interest for the reason that the interest is minor and remote in nature.

PROCEDURAL MOTION moved Cr Owen-Jones seconded Cr O’Neill Pursuant to section 175E(4)(a) of the Local Government Act 2009, Council resolves that: Cr Gates does not have a conflict of interest in this matter because the interest as disclosed is minor and remote in nature.

CARRIED

In accordance with Section 175E(4) of the Local Government Act 2009, Cr Caldwell, Cr Vorster and Cr Gates did not vote.

773rd Council Meeting 14 May 2019 341 Special Budget & Finance Committee Meeting 13 May 2019 Adopted Report

CLOSED SESSION LOCAL GOVERNMENT ACT 2009 AND SUPPORTING REGULATIONS

PROCEDURAL MOTION Moved Cr Tate seconded Cr Gates

That the Committee move into Closed Session pursuant to section 275 (1) of the Local Government Regulation 2012, for the consideration of the following item/s for the reason/s shown:-

Item Subject Reason

7 External Presentation – Study Gold Coast Budget Matter

CARRIED

A Presentation was made by Study Gold Coast.

Consideration of the report relating to Study Gold Coast’s Proposed Funding 2019-20 to be dealt with at the Special Budget & Finance Committee Meeting on 20 May 2019.

PROCEDURAL MOTION Moved Cr Tozer seconded Cr Owen-Jones

That the Committee move into Open Session.

CARRIED

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ITEM 8 OFFICE OF THE CHIEF OPERATING OFFICER TOTAL ASSET MANAGEMENT PLAN LG343/1045/13/01(P1) Attachment 1 – Total Asset Management Plan 2019-20 to 2028-29 Attachment 2 – Condition Rating Descriptions Attachment 3 – Asset Condition Comparative Data

1 BASIS FOR CONFIDENTIALITY

1.1 I recommend that this report be considered in Closed Session pursuant to section 275 (1) of the Local Government Regulation 2012 for the reason that the matter involves

(c) the local government’s budget; or

1.2 I recommend that the report/attachment be deemed non-confidential except for those parts deemed by the Chief Executive Officer to remain confidential in accordance with sections 171 (3) and 200 (5) of the Local Government Act 2009.

2 EXECUTIVE SUMMARY

Not applicable

3 PURPOSE OF REPORT

The purpose of this report is to seek Council adoption of the Total Asset Management Plan for 2019-20 to 2028-29 in accordance with legislative requirements.

4 PREVIOUS RESOLUTIONS

GA13.0618.008 (in part) 3. That the Total Asset Management Plan be presented to Council annually prior to commencement of the annual budget process.

SBF18.0521.007 (in part) 3. That in early 2019 (prior to 2019-20 budget deliberations), Standing Committees review the outputs of the Asset Management Plans for relevant categories of infrastructure, with particular emphasis on assets in ‘poor’ and ‘very poor’ condition and infrastructure renewal requirements.

G18.0621.032 (in part) 2. That Council adopt the following: b. The Total Asset Management Plan 2018-19 to 2027-18 (Attachment 12)

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ITEM 8 (Continued) TOTAL ASSET MANAGEMENT PLAN LG343/1045/13/01(P1)

5 DISCUSSION

Background Infrastructure asset management is taking a systematic approach to manage infrastructure assets through all lifecycle phases. This involves applying a combination of engineering, financial and other technical practices to the management of infrastructure: costs; opportunities; risks; and performance. Put simply, asset management is understanding the following about the City’s infrastructure assets:

• What assets does the City have and where are they?

• What condition are the assets in and how are they performing over time?

• What is the approach to maintaining the assets, including when were the assets last maintained and what maintenance activities are scheduled?

• What is the approach to renewing the assets, including what assets have already been renewed and what assets need to be refurbished, replaced or upgraded?

Consistent with legislative trends across Australia, the Queensland Local Government Act (2009) has requirements for Councils to develop and adopt long-term asset management plans. While legislation has been one driver of asset management planning, it is important to recognise that it is good management practice to utilise these techniques to sustainably manage infrastructure assets, which is an essential component of financial sustainability.

Council has a large and diverse infrastructure base which has a replacement cost of over $19B split by asset category as follows: Infrastructure Replacement Costs Asset Category Replacement Replacement Value by % Value $B

Transport $5,450 28.4% Flood Mitigation & Drainage $5,800 30.2% Sewerage $3,516 18.3% Water Supply $2,343 12.2% Parks, Recreation & Open Space $960 5.0% Community Facilities $506 2.6% Corporate Buildings $262 1.4% Beaches & Waterways $286 1.5% Solid Waste $90 0.5% Total Replacement Cost $19,213 100.0%

Asset Management Plans for the infrastructure assets are updated annually as part of the planning and budget process. The annual updates include revised infrastructure renewal requirements based on analysis of relevant factors such as recent (and historic) condition data and asset performance data.

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ITEM 8 (Continued) TOTAL ASSET MANAGEMENT PLAN LG343/1045/13/01(P1)

The outputs of the seven Asset Management Plans are summarised into the Total Asset Management Plan. This allows Council to adopt the overarching Total Asset Management Plan as opposed to individually adopting each of the asset management plans. The 2018-19 to 2027-28 Total Asset Management Plan was adopted by Council in June 2017 in conjunction with adoption of the 2017-18 annual budget.

Overview of the Total Asset Management Plan for 2019-20 to 2028-29 The Total Asset Management Plan (Attachment 1) has been updated based on the most recent version of the Asset Management Plans. The Total Asset Management Plan includes:

• An overview of the infrastructure assets under Council’s control.

• Information on the condition of the infrastructure assets.

• The 2019-20 infrastructure renewal requirements i.e. renewal (refurbishment and replacement) required to maintain current levels of service for existing infrastructure.

• Estimates and indicative trends of renewal funding requirements for future years.

• Summary information on proposed new and upgraded infrastructure.

• A set of key messages for each asset management plan (see Appendix A of the Total Asset Management Plan).

Asset Condition Assessments Condition assessments are a key component of infrastructure asset management and underpin asset management planning, asset revaluations and asset risk management.

When developing work programs to undertake condition assessments, consideration is given to benefit/cost and there are a number of factors that influence the prioritisation of condition assessments for example: asset criticality/profile, age, environment, utilisation, location, etc.

Although condition assessments are very important, it is not affordable or practical to assess the condition of all infrastructure assets. Recent condition data, along with asset performance data, historical information and staff technical knowledge, provides the basis for Asset Condition Profiles that underpin the updated Asset Management Plans.

Asset Condition Rating Descriptions The condition profile of assets in the Asset Management Plans is represented using the ratings of: Very Good, Good, Fair, Poor and Very Poor.

For a description of each of the condition ratings refer Attachment 1, for example:

• Poor condition refers to assets that have a number of minor defects and/or some major defects i.e. the functionality of the assets is reduced. Assets in poor condition may require renewal of minor or major components.

• Very poor condition refers to assets that have a number of major defects or have physically failed i.e. the functionality of the asset is substantially reduced or the asset is not functional. Assets in very poor condition require component or complete renewal or need to be disposed. Asset Deterioration Asset condition deteriorates as assets progress through their lifecycle and generally maintenance costs increase as assets age. The rate of asset deterioration depends on a number of factors, including:

773rd Council Meeting 14 May 2019 345 Special Budget & Finance Committee Meeting 13 May 2019 Adopted Report

ITEM 8 (Continued) TOTAL ASSET MANAGEMENT PLAN LG343/1045/13/01(P1)

• Useful life – assets with shorter useful lives deteriorate faster than long life assets

• Environment – assets in harsher environments deteriorate faster

• Utilisation – assets with high utilisation deteriorate faster

It needs to be noted that:

• For some asset types, it is appropriate and overall more cost effective for the assets to progress into later stages of their lifecycle i.e. into poor or very poor condition.

• Alternatively, there are some types of assets that should not be ‘run to failure’. For example, infrastructure that supports critical services and/or has significant consequences of failure (such as a bridge) may require component or complete renewal at an earlier stage in their lifecycle.

Asset Condition Profile The vast majority (96.8%) of the City’s existing infrastructure is in very good, good or fair condition which is expected given that many of the infrastructure assets are relatively young and have long useful lives. It is also expected that there are some assets in poor and very poor condition as assets progress through their lifecycle, with there being 2.5% of the City’s infrastructure in poor condition and 0.7% in very poor condition.

A summary of the condition of the City’s existing infrastructure is highlighted in figures 1 and 2 below. Figure 1 – Aggregated Condition Data Chart for Each AMP

Figure 2 – Aggregated Condition Data Chart for All AMPs

773rd Council Meeting 14 May 2019 346 Special Budget & Finance Committee Meeting 13 May 2019 Adopted Report

ITEM 8 (Continued) TOTAL ASSET MANAGEMENT PLAN LG343/1045/13/01(P1)

Asset Condition Comparative Data Comparative data on asset condition in Attachment 3 clearly illustrates that the City’s infrastructure asset base is in a comparatively healthy state.

Infrastructure Renewal Requirement The infrastructure renewal requirement for 2019-20 is $117.8M, that is comprised of the following: Asset Category Renewal Requirement Transport $43.6M Flood Mitigation & Drainage $5.6M Sewerage $30.5M Water Supply $11.8M Parks, Recreation & Open Space $8M Community Facilities $9.6M Corporate Buildings $6.1M Beaches and Waterways $1M Solid Waste $1.6M Total $117.8M

If renewal requirements are not funded a ‘renewal backlog’ will accumulate, which increases the potential for service interruptions and asset failures.

The renewal requirement rises to $145.8M (in today’s dollars) per annum in ten years’ time, noting that an increase in the renewal requirement is expected as the infrastructure ages. It should be noted that the renewal requirement beyond 2019-20 is subject to further review as additional data (i.e. condition, performance, etc.) is collected along with more advanced renewals planning analysis once a suitable software tool is available.

Details of the 2019-20 renewal requirement was recently presented to the relevant standing committees as part of the asset condition and renewal requirement agenda items.

It should be noted that renewal requirements figures for transport stated in the Total Asset Management Plan are different to the figures recently presented to the Transport & Infrastructure Committee. This is due to further review of individual project budget submissions in relation the percentage of each project that is renewal works versus new/upgrade works. This did not result in any changes to the funding requested for these projects.

Infrastructure Renewal Requirement: 2019-20 Movement and 10 Year Forecast Trend As stated above, renewal requirements are further reviewed annually including analysis of additional condition data that has been collected, along with other factors such as changes in construction costs and infrastructure renewal techniques. With each annual update of the Asset Management Plans over the past 5 years there has been an obvious trend of renewal requirements being higher than predicted in the previous version of the Asset Management Plans.

773rd Council Meeting 14 May 2019 347 Special Budget & Finance Committee Meeting 13 May 2019 Adopted Report

ITEM 8 (Continued) TOTAL ASSET MANAGEMENT PLAN LG343/1045/13/01(P1)

In comparison to the updated 2019-20 renewal requirement stated in the previous section, the predicted 2019-20 renewal figure from last year’s Total Asset Management Plan was $116.9M in today’s dollars, therefore the movement in the renewal requirement is an increase of $0.9M.

Details of the movement in the 2019-20 renewal requirement and information on the increasing 10 year renewal forecast trend was recently provided to the relevant standing committees as part of the asset condition and renewal requirement agenda items, noting that the remaining agenda item on the Corporate Buildings will be provided to the Events, Tourism & Governance committee on 24 May 2019.

Breakup of Proposed 2018-19 Infrastructure Capital Works The draft Four Year Capital Works Program considered as part of 2019-20 budget discussions, categorises infrastructure capital works projects as:

• End of life renewal driven

• New and upgrade driven

It is important to note that in some instances infrastructure capital works projects driven by ‘end of life renewal’ contain a component of upgrade works, for example:

• Replacement of a particular bridge at end of life with a new bridge that includes a separate pedestrian and cyclists lane (where none previously existed).

• Replacement of a water main at end of life with a larger pipe size to accommodate projected urban densification in the area the asset services.

• Replacement of a toilet block at end of life with a higher standard of asset eg. incorporation of Crime Prevention Through Environmental Design (CPTED) considerations into the design, components with lesser maintenance requirements, improved aesthetics, etc.

• Replacement of a single plate brick barbeque at end of life with a double plate stainless steel barbeque.

In the adopted 2018-19 budget, the funding allocated to ‘end of life renewal’ (excluding upgrade components) accounted for 30% of infrastructure capital works funding. It is anticipated that approximately 26% of infrastructure capital works funding in the 2019-20 budget will be ‘end of life renewal’. The reduction in the percentage is due to an increase in proposed funding for new and upgraded infrastructure in 2019-20.

In making decisions to invest in new and upgraded infrastructure, Council needs to consider the whole-of-life costs of new and upgraded infrastructure, in particular:

• Estimated infrastructure operational costs (maintenance and operations) in the following year from the 2019-20 proposed investment in new and upgraded infrastructure is over $4.5M.

• Increased renewal funding requirements in future due to a larger infrastructure base.

773rd Council Meeting 14 May 2019 348 Special Budget & Finance Committee Meeting 13 May 2019 Adopted Report

ITEM 8 (Continued) TOTAL ASSET MANAGEMENT PLAN LG343/1045/13/01(P1)

Review of Asset Management Plans by Standing Committees In response to Council resolution SBF18.0521.007 part3, agenda items on asset condition and infrastructure renewal requirements were provided to the following standing committees:

• 29 April 2019 Water & Waste Committee:

­ Sewerage

­ Water Supply

­ Solid Waste

• 2 May 2019 Transport & Infrastructure Committee:

­ Transport

­ Flood Mitigation & Drainage

­ Beaches & Waterways

• 2 May 2019 Lifestyle & Community Committee:

­ Parks, Recreation & Open Space

­ Community Facilities

The above agenda items discussed asset condition, including condition assessment programs in place to inform renewal planning and monitor the assets to maintain a level of functionality and public safety until renewal or maintenance works are undertaken.

An agenda item on asset condition and infrastructure renewal requirement for Corporate Buildings will be provided to the Events, Tourism & Governance Committee on 23 May 2019.

It is again proposed that, prior to the 2020-21 budget deliberations, that standing committees review outputs of Asset Management Plans for relevant categories of infrastructure, with particular emphasis on infrastructure renewal requirements and underlying asset condition information.

6 ALIGNMENT TO THE CORPORATE PLAN, CORPORATE STRATEGIES AND OPERATIONAL PLAN

Supporting delivery of the Gold Coast 2022, as follows: B. We plan for the future of the city Key Plans and Programs of Work: Manage the maintenance, renewal and delivery of infrastructure for the city through the Total Asset Management Plan and the forward Capital Works Program

7 FUNDING AND RESOURCING REQUIREMENTS

The required funding for infrastructure renewal in 2019-20 is $117.8M which is based on the infrastructure renewal requirements detailed in the Total Asset Management Plan.

773rd Council Meeting 14 May 2019 349 Special Budget & Finance Committee Meeting 13 May 2019 Adopted Report

ITEM 8 (Continued) TOTAL ASSET MANAGEMENT PLAN LG343/1045/13/01(P1)

8 RISK MANAGEMENT

The following OCOO directorate risk is related to asset management: CR000425 Asset Management maturity below industry level resulting in sub-optimal management of the life-cycle and costs for infrastructure assets.

In the last eight years there has been substantial improvement in the City’s asset management maturity. The further advancement of asset management planning is a key mitigation of this risk, in particular: improving the integrity of renewal forecasts (through collection of additional condition data and a more advanced renewals planning tool); further analysis of risk exposures; and the ongoing updating of Asset Management Plans.

9 STATUTORY MATTERS

Statutory requirements for Asset Management Plans are detailed in:

• Queensland Local Government Act (2009), Section 104

• Local Government Regulation 2012, Sections 167 and 168

10 COUNCIL POLICIES

On 19 June 2015, the Council approved the Asset Management Policy that:

• Sets out Council’s strategic intent for asset management;

• Defines the roles and responsibilities for asset management; and

• Provides a set of guiding principles to inform asset management decision making.

This report does not result in any changes to the above policy.

11 DELEGATIONS

Not applicable.

12 COORDINATION & CONSULTATION

The Total Asset Management Plan has been compiled based on updated Asset Management Plans signed-off by the relevant Asset Custodian, and where applicable content of this report has been consulted with the relevant Asset Custodian or the relevant asset management planning officer on their behalf.

Name and/or Title of the Directorate or Is the Stakeholder Satisfied Stakeholder Consulted Organisation With Content of Report and Recommendations (Yes/No) (comment as appropriate) John Blair, Manager Office of the Chief Operating Yes Corporate Finance Officer

773rd Council Meeting 14 May 2019 350 Special Budget & Finance Committee Meeting 13 May 2019 Adopted Report

ITEM 8 (Continued) TOTAL ASSET MANAGEMENT PLAN LG343/1045/13/01(P1)

13 STAKEHOLDER IMPACTS

Not applicable

14 TIMING

It is recommended that the Total Asset Management Plan be adopted in conjunction with adoption of the 2019-20 annual budget.

15 CONCLUSION

The Total Asset Management Plan highlights that:

• The vast majority (96.8%) of the existing infrastructure base is in very good, good or fair condition due to many of the infrastructure assets being relatively young, the majority of the infrastructure has been well maintained and Council has generally invested in infrastructure renewal when required.

• A steady increase in renewal and maintenance funding requirements is expected as the existing infrastructure base ages and deteriorates.

• Further increases in maintenance and operations funding requirements are expected in the short term as the infrastructure base grows from Council investment in new and upgraded infrastructure and from contributed infrastructure (eg. developer contributed assets).

• When making infrastructure investment decisions in the 2019-20 budget, Council needs to consider: ­ Infrastructure renewal requirements outlined in the Total Asset Management Plan. ­ Whole-of-life costs of new and upgraded infrastructure, i.e. additional operational costs (maintenance and operations) in the following years and increased renewal funding requirements in future due to a larger infrastructure base.

The infrastructure renewal requirement for 2019-20 is $117.8M, raising to $145.8M (in today’s dollars) per annum in ten years’ time. In adopting the Total Asset Management Plan, Council recognises the need for infrastructure renewal funding in 2019-20 and acknowledge that if renewal requirements are not funded a ‘renewal backlog’ will accumulate, which increases the potential for service interruptions and asset failures.

773rd Council Meeting 14 May 2019 351 Special Budget & Finance Committee Meeting 13 May 2019 Adopted Report

ITEM 8 (Continued) TOTAL ASSET MANAGEMENT PLAN LG343/1045/13/01(P1)

16 RECOMMENDATION

It is recommended that Council resolves as follows:

1 That the report/attachments be deemed non-confidential except for those parts deemed by the Chief Executive Officer to remain confidential in accordance with sections 171 (3) and 200 (5) of the Local Government Act 2009. 2 That the Total Asset Management Plan be adopted in conjunction with adoption of the 2019-20 annual budget, noting the following: a That the infrastructure renewal requirement of $117.8 million is fully funded. b That the vast majority (96.8%) of the City’s infrastructure assets are in very good, good or fair condition and national comparative data on asset condition illustrates that the City’s infrastructure asset base is in a comparatively healthy state. c That in April and May 2019, the Water & Waste, Transport & Infrastructure and Lifestyle & Community Committees reviewed the outputs of the Asset Management Plans for relevant categories of infrastructure, including the condition assessment programs in place to inform renewal planning and monitor assets to maintain functionality and public safety. d That an agenda item on asset condition and infrastructure renewal requirement for Corporate Buildings will be provided to the Events Tourism & Governance Committee 23 May 2019 meeting. 3 That prior to 2020-21 budget deliberations, Standing Committees review the outputs of Asset Management Plans for relevant categories of infrastructure, with particular emphasis on infrastructure renewal requirements and underlying asset condition information.

Author: Authorised by: Andrew Llewellyn Joe McCabe Manager Corporate Asset Management Chief Operating Officer 2 May 2019 TRACKS REF: #73299302

773rd Council Meeting 14 May 2019 352 Special Budget & Finance Committee Meeting 13 May 2019 Adopted Report

ITEM 8 (Continued) TOTAL ASSET MANAGEMENT PLAN LG343/1045/13/01(P1)

COMMITTEE RECOMMENDATION SBF19.0513.007 moved Cr Vorster seconded Cr O’Neill

1 That the report/attachments be deemed non-confidential except for those parts deemed by the Chief Executive Officer to remain confidential in accordance with sections 171 (3) and 200 (5) of the Local Government Act 2009. 2 That the Total Asset Management Plan be adopted in conjunction with adoption of the 2019-20 annual budget, noting the following: a That the infrastructure renewal requirement of $117.8 million is fully funded. b That the vast majority (96.8%) of the City’s infrastructure assets are in very good, good or fair condition and national comparative data on asset condition illustrates that the City’s infrastructure asset base is in a comparatively healthy state. c That in April and May 2019, the Water & Waste, Transport & Infrastructure and Lifestyle & Community Committees reviewed the outputs of the Asset Management Plans for relevant categories of infrastructure, including the condition assessment programs in place to inform renewal planning and monitor assets to maintain functionality and public safety. d That an agenda item on asset condition and infrastructure renewal requirement for Corporate Buildings will be provided to the Events Tourism & Governance Committee 23 May 2019 meeting. 3 That prior to 2020-21 budget deliberations, Standing Committees review the outputs of Asset Management Plans for relevant categories of infrastructure, with particular emphasis on infrastructure renewal requirements and underlying asset condition information.

CARRIED

773rd Council Meeting 14 May 2019 353 Special Budget & Finance Committee Meeting 13 May 2019 Adopted Report

ITEM 8 (Continued) TOTAL ASSET MANAGEMENT PLAN LG343/1045/13/01(P1)

Please refer to Attachment 1 – Total Asset Management Plan (Infrastructure Assets) 2019-20 to 2028-29

Attachment 1 Page 354

TO BE ADOPTED 13 JUNE 2019 Attachment 1 Page 355

This Total Asset Management Plan:  Is informed by Asset Management Plans that are based on the best available data at the time  Provides renewal (refurbishment and replacement) funding requirements for 2019-20  Provides renewal estimates and indicative trends for the following years up to 2028-29  Provides the basis for the City to meet the legislative requirement for asset management plans to underpin the City’s Long-Term Financial Plan and the 2019-20 Annual Budget with respect to infrastructure renewal.

DOCUMENT CONTROL

Date Version Document Reference Comments 1/05/2019 1 #73345994(PDF) For Special Budget Committee Attachment 1 Page 356 Contents

Section Page

1. Introduction0B ...... 1 1.1 Purpose5B ...... 1 1.2 Scope6B ...... 1 1.3 Structure7B of the Total Asset Management Plan ...... 2 2. Existing1B Infrastructure Base ...... 3 2.1 Replacement8B Cost ...... 3 2.2 Infrastructure9B Quantities ...... 3 3. Historic2B Information ...... 4 3.1 Overall10B Infrastructure Growth Trend ...... 4 3.2 Infrastructure11B Renewal (Refurbishment & Replacement) ...... 4 3.3 New/Upgraded12B Infrastructure ...... 4 3.4 Contributed Infrastructure ...... 4 3.5 Infrastructure13B Maintenance ...... 4 4. Lifecycle3B Management & Funding Requirements ...... 5 4.1 Infrastructure14B Condition ...... 5 4.2 Infrastructure Renewal (Refurbishment & Replacement) ...... 6 4.3 New/Upgraded16B Infrastructure ...... 6 4.4 Infrastructure17B Maintenance ...... 7 4.5 Infrastructure19B Sustainability ...... 8 5. Conclusion...... 4B 9

Appendices Number Page

A.1 Transport 11 A.2 Flood Mitigation & Drainage 12 A.3 Sewerage 13 A.4 Water Supply 14 A.5 Parks, Recreation & Open Spaces 15 A.6 Community Facilities 16 A.7 Corporate Buildings 17 A.8 Beaches & Waterways 18 A.9 Solid Waste 19 Figures Number Page

1.1.1 Asset Lifecycle 1 1.3.1 Asset Management Plan Hierarchy 2 2.1.1 Infrastructure Replacement Costs 3 2.1.2 Infrastructure Base Dissection 3 3.1.1 Growth of Road Network 4 4.1.1 Aggregated Condition Data Chart 5 4.1.2 Aggregated Condition Data Chart for all AMP’s 5 4.2.1 Required Renewal Funding Graph 6 4.3.1 Additional Operational Expenditure for New/Upgraded Infrastructure 7 4.5.1 Required Renewal vs Proposed Renewal in Budget 9 Attachment 1 Page 357

1. Introduction0B

1.1 Purpose5B Infrastructure asset management is taking a systematic approach to manage infrastructure assets through all lifecycle phases. This involves applying a combination of engineering, financial and other technical practices to the management of infrastructure: costs; opportunities; risks; and performance.

Figure 1.1.1 – Asset Lifecycle

Asset management planning is a key element of infrastructure asset management. It is a written statement of the strategies used to manage the City’s infrastructure and the resultant funding requirements for informed infrastructure investment decisions. The development of asset management plans also helps identify gaps in infrastructure asset management processes, systems, data and skills.

The outputs of the asset management plans are summarised in this Total Asset Management Plan in order to:  Detail what infrastructure assets are under the City’s control.  Provide information on the condition of the infrastructure assets.  Provide a business case for long-term funding requirements, in particular renewal (i.e. refurbishment and replacement) of existing infrastructure.  Meet requirements of section 104 of the Local Government Act (2009) and sections 167 and 168 of the Local Government Regulation (2012) for long-term asset management plans with respect to infrastructure renewal.

1.2 Scope6B This Total Asset Management Plan covers the major infrastructure assets under the control of the City prior to 30 June 2019. The following are not covered in this plan:  Renewal, new/upgrade and maintenance funding requirements of Parks & Recreation leased buildings;  City Placemaking infrastructure capital works;  Funding requirements for land purchases;  Non-physical infrastructure assets, for example fleet & plant, office equipment & furniture, information communication & technology, etc; and  Green assets, for example trees, soft landscaping, etc.

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1.3 Structure7B of the Total Asset Management Plan Figure 1.3.1 illustrates the eight asset management plans that have been developed and certified by the City’s asset custodians, or currently under development, and then summarised into this overarching Total Asset Management Plan.

Figure 1.3.1 - Asset Management Plan Hierarchy

Total Asset Management Plan Mgr Corporate Asset Mgt

Water and Waste Parks, Recreation & Community Facilities Flood Mitigation & Beaches & Waterways Transport AMP AMP Open Spaces AMP AMP Corporate Buildings Drainage AMP AMP AMP Mgr City Assets Director Water and Mgr Parks & Various Asset Mgr City Assets Mgr City Assets Waste Recreational Svcs Custodians Mgr Property Services

Traffic and Pedestrian Water Supply Library Buildings Management Mgr City Libraries Sewage Structures collection, Animal Management treatment and Facilities reuse Mgr Health, Reg & Lifeguard Svcs Roads and Road Solid Waste Inventory Managment Lifeguard Facilities Mgr Health, Reg & Lifeguard Svcs

Cemeteries Mgr Community Venues & Svcs Major Sporting Venues Mgr Community Venues & Svcs

Tourist Parks Mgr Community Venues & Svcs

Community Venues Mgr Safe & Liveable Communities

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2. Existing1B Infrastructure Base

2.1 Replacement8B Cost The City has a large and diverse infrastructure base, as illustrated below. The infrastructure base is underpinned by a land portfolio comprised of freehold, leasehold and reserves. The City’s freehold land has a combined value of $2.07B.

Figure 2.1.1 – Infrastructure Replacement Costs

Asset Category Replacement Replacement Value by % Value $B Transport $5,450 28.4% Flood Mitigation & Drainage $5,800 30.2% Sewerage $3,516 18.3% Water Supply $2,343 12.2% Parks, Recreation & Open Space $960 5.0% Community Facilities $506 2.6% Corporate Buildings $262 1.4% Beaches & Waterways $286 1.5% Solid Waste $90 0.5% Total Replacement Cost $19,213 100.0% Figure 2.1.2 – Infrastructure Base Dissection

2.2 Infrastructure9B Quantities Appendix A includes a detailed listing of the quantities for the various types of assets that make up the infrastructure base.

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3. Historic2B Information

3.1 Overall10B Infrastructure Growth Trend The majority of the City’s existing infrastructure base was constructed from the 1960’s to today, as illustrated by growth of the road network which is indicative of the growth of the overall infrastructure base.

Figure 3.1.1 – Growth of Road Network

3.2 Infrastructure1B Renewal (Refurbishment & Replacement) Infrastructure renewal is the refurbishment and/or replacement of existing infrastructure at the end of its useful life, that reinstates the original level of service. Over the last five years an estimated $548M of the City’s capital works program, was invested in infrastructure renewal. The budget allocated for infrastructure renewal funding in 2018-19 was $104.5M.

3.3 New/Upgraded12B Infrastructure Over the last five years over $541M of the City’s capital works program was invested in the upgrading of existing infrastructure (i.e. asset expansion or increased levels of service) and the construction of new infrastructure. It is estimated that the additional total operational expenditure associated with this new/upgraded infrastructure is $18.2M.

3.4 Contributed Infrastructure Over the last five years, $619M of infrastructure was contributed to the city, which resulted in an estimated additional total operational expenditure of $19.7M.

3.5 Infrastructure13B Maintenance Infrastructure maintenance is the activities that ensure existing infrastructure remains in service (i.e. in an operational state) until the end of its useful life. Historically, the City’s maintenance practices have ensured that the majority of infrastructure is well maintained and, as a result, the rate of infrastructure deterioration has generally been kept at a minimum.

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4. Lifecycle3B Management & Funding Requirements

4.1 Infrastructure14B Condition The vast majority of the City’s existing infrastructure base is in very good, good or fair condition. This is expected given that many of the infrastructure assets are relatively young and have long useful lives. Although this is generally the case, there are a small proportion of infrastructure assets in poor and very poor condition.

The graph below provides an aggregated view of the condition of the infrastructure assets covered by each asset management plan. More detailed information on the condition of the infrastructure assets, and other lifecycle management issues, is contained in Appendix A.

Figure 4.1.1 – Aggregated Condition Data Chart for Each AMP

The graph below provides an aggregated view of the condition of the infrastructure assets covered by all of the asset management plans. The chart illustrates that 3.2% of the City’s infrastructure assets are in poor and very poor condition.

Figure 4.1.2 – Aggregated Condition Data Chart for All AMPs

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4.2 Infrastructure Renewal (Refurbishment & Replacement) Infrastructure asset management planning has a strong focus on determining the renewal funding required to maintain current levels of service for existing infrastructure.

The renewal forecasting techniques are based on a combination of predictive modelling (based on condition data where available) and the application of technical judgement (using practitioner knowledge of the infrastructure assets). In most cases, the forecasting has been conducted at an aggregated/network level with the underlying assumptions being checked by the relevant asset custodians. In some cases, more detailed analysis has been undertaken at the individual asset or asset component level.

Given that the infrastructure base is in relatively good condition, the forecasting has not identified a large backlog of required renewal or a ‘great wall’ of renewals in the coming years. However, the forecasting indicates an increase in required renewal funding in the next ten years as the infrastructure continues to age and deteriorate. Note, the following renewal requirement amounts in Figures 4.2.1 are in ‘todays’ dollars.

Figure 4.2.1 – Required Renewal Funding Graph

Year 5 – 10 renewal forecast

4.3 New/Upgraded16B Infrastructure There are a number of drivers of new and upgraded infrastructure both now and in the coming years, including the:  Transport Strategy

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 Ocean Beaches Strategy  Economic Development Strategy  Culture Strategy  Solid Waste Management Strategy  Stormwater Drainage Management (providing relief drainage standards)  Appropriate community infrastructure and facilities for city residents  Local Government Infrastructure Plan

In making decisions to invest in new and upgraded infrastructure, it is the responsibility of Council to consider the whole-of-life costs of the infrastructure assets, in particular:  Additional operational expenditure (maintenance and operations costs) in the following years; and  Increased renewal funding requirements in the future due to a larger infrastructure base.

Figure 4.3.1 indicates estimated additional operational expenditure in the following years associated with new and upgraded infrastructure investments proposed in the draft 2019-20 capital budget.

Figure 4.3.1 – Additional Operational Expenditure for New/Upgraded Infrastructure

Asset Group Proposed Estimated New/Upgrade Additional OPEX CAPEX in 2019-20 in Future Years ($M) ($000) Transport* $124.0 $747 Flood Mitigation & Drainage $11.7 $260 Sewerage $99.8 $667 Water Supply $5.8 $37 Parks, Recreation & Open Space $29.1 $1,088 Community Facilities $46.0 $1,567 Corporate Buildings $10.8 $121 Beaches & Waterways $3.0 $47 Waste Management $11.7 $40 Total $341.8 $4,574

In addition to the above, there will be further additional operational expenditure associated with developer contributed assets that come ‘off maintenance’ during 2019-20.

4.4 Infrastructure17B Maintenance A steady increase in required maintenance and operations funding is expected in the next ten years as:  The existing infrastructure base ages and deteriorates  The infrastructure base grows from the Council’s investment in new & upgraded infrastructure and from contributed infrastructure (eg. developer contributed infrastructure)

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4.5 Infrastructure19B Sustainability Infrastructure is sustainable when levels of service and infrastructure investments (in particular renewal) are prioritised and met in the long-term without unplanned increases in rates and charges or service interruptions.

Continuing to fund infrastructure renewal to the required extent is essential to ensure the sustainability of the infrastructure base. Failure to fund infrastructure renewal requirements without deciding to decrease service levels or dispose of infrastructure assets has a number of implications, including:  A renewal backlog (i.e. difference between required renewal and budget) would accumulate, that increases the amount of renewal funding required in future years  Risk exposures from infrastructure failures  Service interruptions due to infrastructure failures and/or unplanned closures  Unplanned reduction in the current levels of service

Also, the State Government monitors the City’s infrastructure sustainability annually through the Asset Sustainability Ratio (in conjunction with the financial sustainability ratios). As recommended by the Queensland Audit Office, the City also uses the Asset Renewal Funding Ratio and the Asset Consumption to monitor infrastructure sustainability.

Figure 4.5.1 indicates the capital renewal included in the Long-Term Financial Model is sufficient to fund required infrastructure renewal stated in the Total Asset Management Plan. This illustrates that the City’s infrastructure asset base is sustainable.

Note, the following renewal requirement amounts in Figures 4.5.1 are in ‘todays’ dollars.

Figure 4.5.1 – Required Renewal vs Proposed Renewal in Long-Term Financial Model

Year 5 - 10 renewal forecast

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5. Conclusion4B

The City’s existing infrastructure base is mostly in very good, good or fair condition, which is due to many of the infrastructure assets being relatively young, the majority of the infrastructure assets being well maintained and Council generally investing in infrastructure renewal when required.

A steady increase in renewal and maintenance funding requirements is expected as the existing infrastructure base ages and deteriorates. Also further increases in maintenance and operations funding requirements are expected in the short term as the infrastructure base grows from Council’s investments in new & upgraded infrastructure and from contributed infrastructure (eg. developer contributed assets).

In making infrastructure investment decisions in the 2019-20 budget, it is recognised that Council must:  Consider infrastructure renewal funding requirements outlined in this Total Asset Management Plan.  Recognise that a ‘renewal backlog’ accumulates if renewal requirements are not funded, along with the increased potential for service interruptions and asset failures.  Consider whole-of-life costs of proposed investment in new and upgraded infrastructure, i.e. additional operational costs (maintenance and operations) in future years and increased renewal funding requirements in the future due to a larger infrastructure base.

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Appendix A

Summaries of Asset Management Plans and Key Messages for Each Asset Group Attachment 1 Page 367 A.1 Transport Summary Lifecycle Management Issues Asset Condition & Risk: Asset Group Unit Qty Replacement Cost ($) • The majority of transport assets are in very good, good or fair condition. • 1% of surface & pavement is in poor condition and 1% is in very poor condition. The Rehabilitation & Reseal Program delivers preventative Surface & Pavement m2 25,714,732 1,888,334,780 treatments/early intervention on roads to prolong pavement life. The Road Reconstruction Program focuses on roads in very poor condition Bridges, Footbridges & Major Culverts each 710 $921,214,386 where the pavement is showing signs of failure. • 2% of traffic control assets (controllers and lanterns) are in Very Poor condition, these are scheduled for renewal within the next four years Kerb km 5,372 $1,410,814,091 as part of an ongoing program of controller replacement. Retaining Walls m 53,790 $87,541,459 • 3% of bridges and major culverts are at intervention, all are programmed for capital renewal or maintenance within the next 4 years. All of these assets have a Structure Management Plan in place to effectively monitor and maintain these assets to ensure that a level of functionality Pathways m2 1,835,390 $544,850,199 and public safety is provided until scheduled renewal works are undertaken. Medians & Islands m2 1,247,571 $385,747,672 Management & Operational Issues: Traffic Control / Street Lighting items 18,578 $131,379,367 • Significant issues have been identified with steel corrugated culverts not achieving their design lives. Those approaching intervention work Other Road Inventory ‐ $80,084,380 have been programmed and prioritised in the 10 year capital works program. • Many bridges constructed prior to 1990 are not reaching the City's adopted designed life of 100 years due to the following: TOTAL $5,449,966,334 ‐ The design code prior to 1990 allowed bridges to be constructed to a lesser standard with less durability ‐ Most are over salt water (aggressive environment) Condition Asset Management Improvements: • Finalise and implement Maintenance Specifications including inspection schedules and response times. Surface & Pavement • Based on analysis of condition data, document asset performance issues and trends along with the treatment options considered, leading to 73% 21% 4% 1% 1% more refined renewal forecasts.

Bridges, Footbridges & End of Life Renewal Requirements for 2019-20 include: Major Culverts 52% 36% 9% 3% • Reseal and Rehabilitation of existing roads 2019‐20 $23.43m • Reconstruction of Old Pacific Hwy, Yatala 2019‐20 $2m, 2019‐20 to 2020‐21 total $4m Kerb 27% 67% 6% • Kerb and Channel Replacement 2019‐20 $2.76m, 2019‐20 to 2028‐29 total $38.69m • Kirra Point Boardwalk Renewal, Kirra 2019‐20 $1.6m • Reconstruction of Ward Street (Marine St to Boundary St), Coolangatta 2019‐20 $1.03m Retaining Walls 15% 62% 16% 5% 2% Very Good • Retaining Wall Repair Armstrong Way, Highland Park 2019‐20 $820k Good • Continuation of project approved in 2016‐17 to reconstruct the road pavement of Golden Four Drive 2019‐20 $2.02m Pathways 25% 52% 23% Fair New/Upgrade Proposals for 2019-20 include: Poor • Bridge Duplication Via Roma Surfers Paradise 2019‐20 $25m, 2019‐20 to 2021‐22 total $50m Medians & Islands 31% 55% 14% • Gold Coast Highway Waterways Drive Mermaid Beach 2019‐20 $14.7m, 2019‐20 to 2021‐22 total $31.1m Very Poor • GC Cultural Precinct ‐ Green Bridge 2019‐20 $11.3m • Foxwell Road upgrade Pacific Motorway 2019‐20 $6.8m Traffic Control / Street 29% 26% 43% 2% • Pearsons Road upgrade 2019‐20 $6.7m Lighting • Yawalpah Road Pimpama 2019‐20 $6.4m, 2019‐20 to 2022‐23 total $23.2m • Cemetery Road Coomera 2019‐20 $5.6m Other Road Inventory 53% 30% 16% 1% • Old Coach Road upgrade Stage 1 2019‐20 $5.4m • Gilston Road Nerang 2019‐20 $5.2m

Required End of Life Renewal vs Proposed Renewal Capex Proposed End of Life Renewal & New/Upgrade Capex $180,000 $70,000 Year 5-10 renewal forecast Year 5-10 renewal forecast Year 5-10 renewal forecast $160,000 $60,000 $140,000 $50,000 $120,000 $000

$000

$40,000 $100,000

$80,000 $30,000 $60,000 Expenditure

Expenditure $20,000 $40,000

$10,000 $20,000

$0 $0 19‐20 20‐21 21‐22 22‐23 23‐24 24‐25 25‐26 26‐27 27‐28 28‐29 19‐20 20‐21 21‐22 22‐23 23‐24 24‐25 25‐26 26‐27 27‐28 28‐29 Required Renewal $43,639 $55,529 $53,217 $57,958 $58,922 $56,123 $56,558 $57,119 $58,249 $57,873 Proposed New/Upgrade $123,975 $94,441 $97,578 $112,770 $112,386 $74,043 $62,339 $77,199 $63,014 $35,686 Proposed Renewal $43,639 $55,529 $53,217 $57,958 $58,922 $56,123 $56,558 $57,119 $58,249 $57,873 Proposed Renewal $43,639 $55,529 $53,217 $57,958 $58,922 $56,123 $56,558 $57,119 $58,249 $57,873

Page 11 Attachment 1 Page 368 A.2 Flood Mitigation & Drainage Summary Lifecycle Management Issues Asset Condition & Risk: Asset Group Unit Qty Replacement Cost ($) • The majority of flood mitigation & drainage assets are in very good, good or fair condition. • Drainage assets (including pipes, surface drains, and minor culverts) identified as being in very poor condition have been prioritised and Drainage Pipes km 2,574 $3,902,294,027 scheduled for renewal works within the next 2 to 4 years. Inlet Gullies & Manholes each 115,973 $1,374,470,738 • Stormwater pipes that are older, tidal and/or subject to acid sulphate soils have been the focus for assessments as they are subject to accelerated deterioration leading to early renewal intervention being required. As a result the stormwater pipe reline program is steadily End Structures each 12,695 $129,929,847 increasing over the forward 10 years. Referable Dams each 3 $48,630,002 • Cross road minor culverts are currently being subjected to increased assessment as the consequences of failure are high. Typical failure modes observed to date include pipe fractures, pipe collapse or vertical joint displacement due to loading. An increased renewal program to Fittings, Telemetry & GPT's each 1,451 $60,453,600 address minor culverts has been included in the proposed 2019‐20 budget. Weirs each 103 • There are a number of Water Sensitive Urban Design (WSUD) assets assessed as being at renewal intervention. Those requiring significant $41,292,480 renewal works have been listed within the capital renewal program. The remaining assets have component defects being addressed through Basins, Wetlands, Swales each 486 $86,072,921 maintenance works. Stormwater Pump Station each 1 $154,500 Management & Operational Issues: Surface Drains km 266 $156,250,753 • While a large proportion of stormwater pipes have not been condition assessed to date, the assessment program is expanding with a focus TOTAL $5,799,548,868 on prioritising higher risk , ageing and pipes subject to environmental factors such as acid sulphate soils. It is expected that as the condition assessment program expands the renewal forecast will likely need to rise as the assets age and degrade over time. Condition Asset Management Improvements: • Expand the condition assessment program to better understand current and potential risks and associated maintenance and renewal needs. Drainage Pipes 57% 40% 1% 1% 1% • Finalise and implement Maintenance Specifications including inspection schedules and response times. • Based on analysis of condition data, document asset performance issues and trends along with the treatment options considered, leading to more refined renewal forecasts. Inlet Gullies & Manholes 36% 58% 6% End of Life Renewal Requirements for 2019-20 include: End Structures 21% 54% 22% 3% • Stormwater Pipe Network Renewal Program 2019‐20 $1.66m • Renewal and replacement of minor culverts 2019‐20 $732k Referable Dams 100% • Referable Dams renewal works to maintain compliance with QLD Dam Safety Management Guideleines 2019‐20 $471k Very Good • Restoration of Biggera Creek storage capacity 2019‐20 $780k • Category 1 and 2 Emergent works supporting the stormwater drainage management strategy 2019‐20 $963k Fittings, Telemetry & Good • Open Drain renewals 2019‐20 $285k, 2019‐20 to 2028‐29 total $3.14m GPT's 73% 25% 2% Fair Weirs 60% 39% 1% Poor New/Upgrade Proposals for 2019-20 include: • Stage 4 of Miami and Burleigh Catchment upgrade works 2019‐20 $150k, 2019‐20 to 2021‐22 total $300k Basins, Wetlands, Swales Very Poor 33% 17% 19% 23% 8% • Drainage upgrade works in the Hythe Mountain View catchment, Miami 2019‐20 $903k • Boundary Street stage upgrade, Currumbin 2019‐20 $3.5m Stormwater Pump Station 100% • Stage 4 of Mountain View catchment, Miami 2019‐20 $2.8m • Drainage upgrade in proximity to Thrower Drive, Panorama Drive and Duringan Street Currumbin 2019‐20 $550k Surface Drains 2% 62% 29% 7% • Installation of safety measures on various stormwater inlets and outlets 2019‐20 $180k

Required End of Life Renewal vs Proposed Renewal Capex Proposed End of Life Renewal & New/Upgrade Capex $10,000 $35,000 Year 5-10 renewal forecast Year 5-10 renewal forecast Year 5-10 renewal forecast $9,000 $30,000 $8,000 $7,000 $25,000 $000 $000 $6,000

$20,000 $5,000 $15,000 $4,000

$3,000 Expenditure

Expenditure $10,000 $2,000 $5,000 $1,000 $0 $0 19‐20 20‐21 21‐22 22‐23 23‐24 24‐25 25‐26 26‐27 27‐28 28‐29 19‐20 20‐21 21‐22 22‐23 23‐24 24‐25 25‐26 26‐27 27‐28 28‐29 Required Renewal $5,649 $8,008 $4,911 $5,605 $5,551 $5,757 $5,776 $6,875 $7,465 $9,052 Proposed New/Upgrade $11,657 $11,709 $9,685 $23,109 $9,625 $12,433 $14,326 $12,140 $9,178 $14,558 Proposed Renewal $5,649 $8,008 $4,911 $5,605 $5,551 $5,757 $5,776 $6,875 $7,465 $9,052 Proposed Renewal $5,649 $8,008 $4,911 $5,605 $5,551 $5,757 $5,776 $6,875 $7,465 $9,052

Page 12 Attachment 1 Page 369 A.3 Sewerage Summary Lifecycle Management Issues Asset Condition & Risk: Asset Group Unit Qty Replacement Cost ($) • The majority of sewerage assets are in Very Good, Good or Fair condition. • $4.5 million of work is planned for replacement or relining of sewerage non‐pressure pipes and associated assets which have been inspected Non‐Pressure Pipes km 2,988 1,796,425,741 using CCTV. Pressure Pipes km 405 • Sewer Pressure Valves and Pits condition assessment program is underway. The initial round of assessments indicated a requirement for a $463,991,781 re‐assessment frequency of five years. Recycled Water Mains km 117 $235,641,163 • A one year trial condition assessment program is underway for Sewer Connections. Also funding has been allocated to an Infiltration Maintenance Holes each 69,156 Reduction Pilot Trial. $284,005,765 • Maintenance holes are to be inspected every 25 years. FY19‐20 to be the first year of combined inspections for Non Pressure Mains and Sewerage Pump Stations each 526 $277,664,889 Maintenance Holes. The current plan is to inspect another ~40% of the maintenance holes in the network over the next 10 years • Sewage Pump Stations are the second largest portion of the value of the poor/very poor condition asset. These assets have been scheduled Sewage Treatment Plants each 4 $421,630,223 for replacement or renewal in the future ten year Sewage Pumping Station Renewals and Refurbishments program 71130 . Other Recycled Water Assets each 15 $5,548,580 Management & Operational Issues: • The current renewals planning approach for risk identification, including the calculation of likelihood and consequence of failure scores is a Stapylton Recycled Water Storage each 1 $6,520,082 labour intensive process due to the lack of a suitable software solution. Recycled Water Treatment Plant each 1 $24,684,578 Asset Management Improvements: • Need to further progress the initiative for an Infrastructure Renewals Planning tool (software). TOTAL $3,516,112,802 • A SAP‐integrated mobile field asset data collection tool is a key business requirement that is under development. • A geometric network‐enabled GIS application is approved and under development. • New relining technology used to repair a large rising main at Biggera Creek water crossing Condition End of Life Renewal Requirements for 2019-20 include: Non‐Pressure Pipes 47% 28% 17% 6% 2% • Sewer Non‐Pressure Main Renewals 2019‐20 $4.5m, 2019‐20 to 2028‐2029 total $56.18m • CO13 Vacuum Pump Station Renewal including vacuum vessel, pumps and safety upgrades 2019‐20 $2.4m • Sewage Pump Station switchboard renewals 2019‐20 $3m Pressure Pipes 32% 35% 28% 5% • Sewer Maintenance Hole Rehabilitation Program 2019‐20 $3.1m, 2019‐20 to 2028‐29 total $29.76m • Sewage Treatment Plant civil renewals 2019‐20 $1.2m • Refurbishment of process tanks at Elanora and Merrimac Sewer Treatment Plants 2019‐20 $3.42m, 2019‐20 to 2020‐21 total $4.64m Recycled Water Mains 21% 69% 9% 1% • Elanora Sewage Treatment Plant Digester A refurbishment 2019‐20 $3.8m • Benowa A102 Sewer Rising Main Stage 2 ‐ Rehabilitation 850 metres of DN750 AC sewer rising main and 250 metres of DN600 AC sewer Very Good rising main 2019‐20 $1.3m Maintenance Holes 15% 58% 26% 1% • Sewage Pump Station wet well relining program 2019‐20 $525k Good Sewerage Pump Stations 30% 32% 25% 7% 6% Fair New/Upgrade Proposals for 2019-20 include: Poor • Long Term Recycled Water Release (Stage 1) 2019‐20 $28.4m, Sewage Treatment Plants 33% 40% 23% 2% 2% • Long Term Recycled Water Release (Stage 2) 2019‐20 $500k, 2019‐20 to 2023‐24 total $110m Very Poor • Long Term Recycled Water Release (Future Stages) 2023‐24 to 2027‐28 $180m • Recycled Water Network Expansion to implement improved utilisation 2019‐20 $3m, 2019‐20 to 2022‐23 total $88.5m Other Recycled Water Assets 46% 28% 21% 5% • Stapylton Sewerage Catchment Diversion (Stage 1) 2019‐2020 $24m, 2019‐20 to 2020‐21 total $42.7m • Stapylton Sewerage Catchment Diversion (Stage 2) 2019‐2020 $3m, 2019‐20 to 2020‐21 total $34.4m • Pimpama to Coombabah Sewage Treatment Plant release main 2019‐20 $5.2m, 2019‐20 to 2023‐24 $28.2m Stapylton Recycled Water Storage 1% 99% • Coombabah STP Stage 6 Upgrade to deal with future growth 2019‐20 $4.9m, 2019‐20 to 2022‐23 total $107.6m Facility • Pimpama Sewage Treatment Plant Stage 2 Works 2019‐20 $4.1m, 2019‐20 to 2022‐23 total $95.1m • Merrimac Sewage Treatment Plant Stage 6 Works 2025‐26 to 2027‐28 total $68m

Required End of Life Renewal vs Proposed Renewal Capex Proposed End of Life Renewal & New/Upgrade Capex $250,000 $35,000 Year 5-10 renewal forecast Year 5-10 renewal forecast Year 5-10 renewal forecast $30,000 $200,000 $25,000 $000

$000 $150,000

$20,000

$15,000 $100,000 Expenditure

Expenditure $10,000 $50,000 $5,000

$0 $0 19‐20 20‐21 21‐22 22‐23 23‐24 24‐25 25‐26 26‐27 27‐28 28‐29 19‐20 20‐21 21‐22 22‐23 23‐24 24‐25 25‐26 26‐27 27‐28 28‐29 Required Renewal $30,478 $22,642 $25,341 $25,783 $26,118 $26,474 $26,803 $27,153 $27,525 $27,872 Proposed New/Upgrade $99,822 $172,679 $165,149 $136,133 $68,256 $48,352 $62,158 $78,066 $101,199 $791 Proposed Renewal $30,478 $22,642 $25,341 $25,783 $26,118 $26,474 $26,803 $27,153 $27,525 $27,872 Proposed Renewal $30,478 $22,642 $25,341 $25,783 $26,118 $26,474 $26,803 $27,153 $27,525 $27,872

Page 13 Attachment 1 Page 370 A.4 Water Supply Summary Lifecycle Management Issues Asset Condition & Risk: Asset Group Unit Qty Replacement Cost ($) • The majority of water supply assets are in Very Good, Good or Fair condition. • Condition modelling and condition assessments have estimated that 5% of the water supply assets are in Poor or Very Poor condition. Potable Water Mains km 3,278 2,035,276,625 • 9% of water meters are nearing or at end of life based on condition modelling and testing of a cohort of meters in 2017‐18. Current funding Pump Stations sites 56 $26,318,262 levels facilitate approximately 16,000 meter replacements per annum. Results from the 2018‐19 cohort testing covering ~32,000 meters will determine if short term funding increases are required. Reservoirs sites 58 $129,316,164 • Water Reservoir assets in poor or very poor condition have been identified by a combination of visual condition assessments by experienced Water Meters each 177,585 operations staff and age‐based condition modelling. None of these are currently a risk to water quality. Detailed structural assessments have $32,906,235 been completed and the results reviewed. A lessons learnt register has been created. 17 structural condition assessments will be carried out in Pressure Reducing Stations sites 63 $5,457,109 2019‐20. km • The initial round of condition assessments for Drinking Water Valves and Pits indicated a requirement for a re‐assessment frequency of five Non‐Drinking Water Mains 191 $110,835,751 years which will be scheduled accordingly. Re‐chlorination Stations sites 5 $1,290,566 Management & Operational Issues: Water Filling Stations sites • The current renewals planning approach for risk identification, including the calculation of likelihood and consequence of failure scores is a 11 $363,067 labour intensive process due to the lack of a suitable software solution. Water Network Control Valves sites 12 $1,245,015 Asset Management Improvements: Repeater Stations sites • Need to further progress the initiative for an Infrastructure Renewals Planning tool (software). 7 $283,500 • Revised renewals planning unit rates have been finalised and a unit rate tool developed. TOTAL $2,343,292,294 • Leak detection capabilities have improved using TaKeDu and OSiPi Data Historian data analytic tools. • A SAP‐integrated mobile field asset data collection tool is a key business requirement that is under development. • A geometric network‐enabled GIS application is approved and under development. Condition End of Life Renewal Requirements for 2019-20 include: Potable Water Mains 25% 36% 34% 5% • Water Main Replacement Program 2019‐20 $6.6m, 2019‐20 to 2028‐29 total $70.7m • Water Meter Replacement Program 2019‐20 $3.6m, 2019‐20 to 2028‐29 total $37.13m • Reservoir Refurbishments 2019‐20 $700k, 2019‐20 to 2028‐29 total $8.99m • Water Pump Station BU1 renewal 2019‐20 $385k Pump Stations 13% 63% 21% 2% 1% • Various Water Pump Stations mechanical and electrical component replacements 2019‐20 $400k

Reservoirs 2% 56% 26% 15% 1% Very Good Good Fair Water Meters 32% 12% 34% 13% 9% New/Upgrade Proposals for 2019-20 include: Poor • Coomera Town Centre Water Trunk Main 2019‐20 $2.51m Very Poor • Smart metering solution 2019‐20 $1.7m Non‐Drinking Water Mains 98% 2% • New water mains in Staplyton and Alberton to accommodate growth 2019‐20 $1.1, 2019‐20 to 2028‐29 total $1.9m • Installation of ~1,600m of Water Mains to accommodate future growth in the Coomera 2019‐20 to 2028‐29 total $3.6m

Re‐chlorination Stations 33% 35% 32%

Required End of Life Renewal vs Proposed Renewal Capex Proposed End of Life Renewal & New/Upgrade Capex $18,000 $20,000 Year 5-10 renewal forecast Year 5-10 renewal forecast Year 5-10 renewal forecast $16,000 $18,000 $16,000 $14,000 $14,000 $12,000 $000

$000 $12,000

$10,000 $10,000 $8,000 $8,000 $6,000

Expenditure $6,000 Expenditure $4,000 $4,000 $2,000 $2,000 $0 $0 19‐20 20‐21 21‐22 22‐23 23‐24 24‐25 25‐26 26‐27 27‐28 28‐29 19‐20 20‐21 21‐22 22‐23 23‐24 24‐25 25‐26 26‐27 27‐28 28‐29 Required Renewal $11,773 $11,448 $12,876 $13,411 $14,007 $14,625 $15,185 $15,712 $16,426 $16,971 Proposed New/Upgrade $5,756 $3,814 $2,328 $1,232 $105 $192 $886 $109 $111 $112 Proposed Renewal $11,773 $11,448 $12,876 $13,411 $14,007 $14,625 $15,185 $15,712 $16,426 $16,971 Proposed Renewal $11,773 $11,448 $12,876 $13,411 $14,007 $14,625 $15,185 $15,712 $16,426 $16,971

Page 14 Attachment 1 Page 371 A.5 Parks, Recreation & Open Space Summary Lifecycle Management Issues Asset Condition & Risk: Asset Group Unit Qty Replacement Cost ($) • The majority of Parks, Recreation & Open Space assets are in Very Good, Good or Fair condition. • Assets in Poor and Very Poor condition have been assessed and where required renewal works have been included in the capital works Amenity Buildings each 245 33,261,276 program. Other Buildings / Leased Buildings each 707 $367,544,957 • 10% of play equipment is in poor condition. These are scheduled for renewal within the next two years as part of an ongoing program of Paths km 265 $81,830,267 replacement. A condition assessment plan is in place to effectively monitor and maintain these assets to ensure that a level of functionality and public safety is provided until scheduled renewal or maintenance works are undertaken. Lighting each 4,004 $44,736,209 Management & Operational Issues: Play Equipment each 2,857 $36,178,045 • There is an under‐supply of open space, sporting and recreation infrastructure within the high growth areas of the city. This issue will be Park Furniture each 6,107 mitigated to a degree through the developer contributed assets and funding of the Local Government Infrastructure Plan . $24,856,946 • Continued growth and development with the emergence of high density areas has and will continue to place increased demands on our Barbeques each 378 $15,174,000 parks and open space, particularly those along the popular foreshore areas. Sports Equipment & Fields each 1,473 $92,292,847 • The capacity of community organisations to effectively maintain the leased facilities continues to vary from lessee to lessee with a significant number requiring support from the City. Roads and Access Ways m2 ‐ $79,377,158 Asset Management Improvements: Drainage ‐ $18,622,162 Improvements in the management of parks, recreation and open space assets continue, for example: Other Site Improvements ‐ • Review of barbeque design standards to minimise frequency of faults $165,748,347 • Introducing new assets on maintenance schedules. TOTAL $959,622,214 • Review of leased buildings asset management including level of rigour, frequency and responsibility associated with leased building inspections • Implement a green asset renewal program for garden beds and grassed areas • Implement the use of “off‐the‐shelf” furniture in low value parks to greatly reduce up‐front capital costs. Condition Amenity Buildings 2% 39% 47% 10% 2% End of Life Renewal Requirements for 2019-20 include: • Play Equipment replacement (26 projects), including Alber Park (Div 10), Deodar Park (Div 12), Glennon Park (Div 8), Kosciusco Crescent Other Buildings / Leased Buildings 14% 55% 25% 5% 1% Reserve (Div 6), Robina Common (Div 11), Varsity Lakes Wetland Reserve (Div 11), Winfield Road Park (Div 1), McKenzie Park (Div 5), Joe Doniger Park (Div 14) and Ned Twohill Park (Div 6) 2019‐20 $1.18m Paths 2% 77% 20% 1% • Fencing replacement 2019‐20 $374k Lighting 13% 58% 29% • Public Convenience refurbishments 2019‐20 $1.17m • Sportsfield lighting renewal at Pizzey Park, Miami, and investigations into Albert and Goodwin Parks 2019‐20 $638k Very Good Play Equipment 11% 27% 52% 10% • Softfall renewal 2019‐20 $307k Good Park Furniture 3% 39% 56% 2% Fair New/Upgrade Proposals for 2019-20 include: Barbeques 6% 45% 43% 6% Poor • Land acquisitions 2019‐20 $6.32m, 2019‐20 to 2026‐27 total $74.3m Very Poor • Pimpama West Sports Park 2019‐20 $2.56m, 2019‐20 to 2023‐24 total $8.27m Sports Equipment & Fields 9% 69% 18% 3% 1% • Trunk infrastructure identified in the Local Government Infrastructure Plan ‐ North, 2019‐20 $5.33m • Trunk infrastructure identified in the Local Government Infrastructure Plan ‐ South, 2019‐20 $4.24m Roads and Access Ways 46% 40% 14% • Slope remediation works including Miami Hill within Lions Head Park, Don McSween Park and Adjacent to Santorini Miami 2019‐20 $1.97m, Other Site Improvements 4% 55% 39% 2% 2019‐20 to 2020‐21 total $3.25m

Required End of Life Renewal vs Proposed Renewal Capex Proposed End of Life Renewal & New/Upgrade Capex $9,000 $45,000 Year 5-10 renewal forecast Year 5-10 renewal forecast Year 5-10 renewal forecast $8,000 $40,000

$7,000 $35,000

$6,000 $30,000 $000 $000

$5,000 $25,000

$4,000 $20,000

$3,000 $15,000 Expenditure Expenditure $2,000 $10,000

$1,000 $5,000

$0 $0 19‐20 20‐21 21‐22 22‐23 23‐24 24‐25 25‐26 26‐27 27‐28 28‐29 19‐20 20‐21 21‐22 22‐23 23‐24 24‐25 25‐26 26‐27 27‐28 28‐29 Required Renewal $7,954 $8,049 $7,559 $8,059 $7,662 $7,787 $7,908 $8,418 $8,108 $8,208 Proposed New/Upgrade $29,101 $30,961 $27,720 $25,544 $28,390 $23,840 $25,791 $29,529 $28,802 $31,506 Proposed Renewal $7,954 $8,049 $7,559 $8,059 $7,662 $7,787 $7,908 $8,418 $8,108 $8,208 Proposed Renewal $7,954 $8,049 $7,559 $8,059 $7,662 $7,787 $7,908 $8,418 $8,108 $8,208 Page 15 Attachment 1 Page 372 A.6 Community Facilities Summary Lifecycle Management Issues Asset Condition & Risk: Asset Group Unit Qty Replacement Cost ($) • The majority of Community Facilities assets are in Very Good, Good or Fair condition. • The majority of Community Facility assets are in Very Good, Good or Fair Condition. Libraries each 12 58,652,850 • Bruce Bishop car park works continue with the decommissioning of the electrical board and relocation of it to the Transit Centre. Lifeguard Towers & Facilities each 47 $5,153,079 • Mal Burke car park structural repair options are being considered during 2019‐20. • Rectification works are being undertaken to ensure the Gold Coast Cycle Centre criterion surface maintains level of service. Animal Management Facilities each 3 $11,212,641 • Planning and delivery works continue at Palm Beach Aquatic and Miami Aquatic Centres during 2019‐20 and future years. Community & Youth Facilities sites 47 $75,272,800 Major Sporting Venues each 6 Management & Operational Issues: $172,649,401 • The increase in number, complexity and breadth of Assets in the Community Facility asset portfolio, has placed increased and potentially Aquatic Facilities each 8 $78,857,424 unsustainable pressure on existing resources to deliver services, operate facilities and conduct proactive asset management. Off Street Car Parks each 7 • By 30 June 2019, an updated and comprehensive asset register, condition assessment, preventative maintenance plan, masterplan and $56,131,843 investment schedule will be available to inform the future Tourist Park Asset Management Plan. Tourist Parks / Camp Grounds each 10 $42,512,448 • City Libraries have identified a need to complete an updated asset audit and condition assessment in 2019‐2020, are currently undertaking an internal strategic review of the library service, and are developing a future‐focused strategic framework Cemeteries each 8 $5,386,322 TOTAL $505,828,808 Asset Management Improvements: • Review existing asset data within the Enterprise Asset Register to ensure asset information and costs can be captured aginast the right building component. • Tourist Parks Investment Plan will inform longer term strategy around renewal of existing assets • Proactive maintenance planning, condition assessments and inspections, to improve renewal planning, reduce reactive/unplanned maintenance Condition Libraries 32% 60% 7% 1% End of Life Renewal Requirements for 2019-20 include: • Libraries renewals 2019‐20 $833k Lifeguard Towers & Facilities 6% 92% 2% • Lifeguard Facilities renewals 2019‐20 $210K • Animal Management Facilities renewals 2019‐20$93k Animal Management Facilities 1% 57% 42% • Community and Youth Facilities renewals 2019‐20 $1.48m • Major Sporting Facility renewals 2018‐19 $886k Community & Youth Facilities 54% 41% 5% • Aquatic Facilities renewals , including part of the Miami Aquatic Centre redevelopment 2019‐20 $3.97m Very Good • Off Street Car Park renewals 2019‐20 $793k Major Sporting Venues 92% 5% 3% Good • Tourist Park / Camp Ground renewals 2019‐20 $1.15m Fair Aquatic Facilities 71% 16% 12% 1% New/Upgrade Proposals for 2019-20 include: Poor • Pimpama Sports Hub at Heritage Park, Pimpama 2019‐20 $34.5m, 2019‐20 to 2020‐21 total $66.56m Off Street Car Parks 1% 75% 19% 5% Very Poor • Expansion and refurbishment of the Albert Waterways Community Centre and the refurbishing and repurposing of the Life Education building, Broadbeach 2019‐20 $2.5m, 2019‐20 to 2020‐21 total $7.41m Tourist Parks / Camp Grounds 5% 55% 39% 1% • Burleigh Beach Tourist Park Villas Acquisition 2019‐20 $287k, • Energy Generation Infrastructure for Aquatic Facilities 2019‐20 $657k Cemeteries 1% 54% 45% • Energy Generation Infrastructure for Library Facilities 2019‐20 $948k

Required End of Life Renewal vs Proposed Renewal Capex Proposed End of Life Renewal & New/Upgrade Capex $20,000 $80,000 Year 5-10 renewal forecast Year 5-10 renewal forecast Year 5-10 renewal forecast $18,000 $70,000 $16,000 $60,000 $14,000 $50,000 $000

$000 $12,000

$10,000 $40,000

$8,000 $30,000

$6,000 Expenditure Expenditure $20,000 $4,000 $10,000 $2,000 $0 $0 19‐20 20‐21 21‐22 22‐23 23‐24 24‐25 25‐26 26‐27 27‐28 28‐29 19‐20 20‐21 21‐22 22‐23 23‐24 24‐25 25‐26 26‐27 27‐28 28‐29 Required Renewal $9,649 $12,425 $17,840 $14,432 $9,652 $7,860 $13,102 $11,756 $6,970 $9,002 Proposed New/Upgrade $46,003 $49,319 $52,946 $49,828 $9,941 $7,906 $6,390 $2,284 $1,791 $2,152 Proposed Renewal $9,649 $12,425 $17,840 $14,432 $9,652 $7,860 $13,102 $11,756 $6,970 $9,002 Proposed Renewal $9,649 $12,425 $17,840 $14,432 $9,652 $7,860 $13,102 $11,756 $6,970 $9,002

Page 16 Attachment 1 Page 373 A.7 Corporate Buildings Summary Lifecycle Management Issues Asset Condition & Risk: Asset Group Unit Qty Replacement Cost ($) • Corporate Building assets are in Very Good, Good or Fair condition • The vast majority of the depot buildings are in Very Good, Good or Fair condition. Two depot buildings are in Poor condition (which equates Depots each 60 35,100,000 to 3% of the depot buildings). These buildings remain fit for purpose and are currently used for storage. Future renewal works are planned for Administration Buildings each 11 these assets. $153,600,000 • There is a small number of assets/asset components approaching end‐of‐life which is expected as assets progress through their lifecycle DMU‐SES Facilities each 10 $3,685,000 • The Administration Buildings portfolio has increased in recent years, along with Property Services taking over custodianship of Depots, the HOTA (Home of the Arts) each 5 $70,000,000 HOTA site and DMU & SES buildings. The asset management and operational resourcing needs require further consideration. TOTAL $262,385,000 Management & Operational Issues: • The cost and extent of works for aluminium composite panel replacement is currently unknown

Asset Management Improvements: • Investigate the implementation of space and accomodation planning software to assist in reduced costs , maximise current use of space and forecast accurate future accomodation requirements • Review existing maintenance plans within the maintenance management system along with ensuring that maintenance history is being recorded for identified assets including assets currently managed through service contracts Condition End of Life Renewal Requirements for 2019-20 include: • Waterside mechanical services switchboard replacement 2019‐20 $700k • Carrara Depot Roof Replacement 2019‐20 $513k, 2019‐20 to 2020‐21 total $1.04m Depots 22% 68% 7% 3% • Waterside Asset Renewals 2019‐20 $473k, 2019‐20 to 2028‐29 total $19.49m • Waterside basement structure repair $450k • HOTA Arts Centre building repaint 2019‐20 $404k • Karp Court asset renewals 2019‐20 $300k, 2019‐20 to 2028‐29 total $10.3m • HOTA Arts Centre fire systems 2019‐20 $300k, 2019‐20 to 2020‐21 total $400k • HOTA Arts Centre asset renewals 2019‐20 $300k, 2019‐20 to 2028‐29 total $8.12m Administration Buildings 9% 73% 18% • Waterside basement exhaust 2019‐20 $256k • Chambers repaint of timber batttens 2019‐20 $250k Very Good Good Fair New/Upgrade Proposals for 2019-20 include: DMU‐SES Facilities 90% 10% Poor • Accomodation planning and relocation 2019‐20 $429k • Installation of new solar PV systems at various administration sites 2018‐19 $285k Very Poor • Install additional emergency exit at Ashmore Depot 2019‐20 $280k • Karp Court generator repalcement 2019‐20 $230k • Ashmore Depot parking improvement 2019‐20 $150k • Upgrade of Disaster Coordination Centre 2019‐20 $7m, 2019‐20 to 2020‐21 total $8.99m HOTA (Home of the Arts) 20% 80%

Required End of Life Renewal vs Proposed Renewal Capex Proposed End of Life Renewal & New/Upgrade Capex $16,000 $20,000 Year 5-10 renewal forecast Year 5-10 renewal forecast Year 5-10 renewal forecast $18,000 $14,000 $16,000 $12,000 $14,000

$10,000 $000

$000 $12,000

$8,000 $10,000 $8,000 $6,000

Expenditure $6,000 Expenditure $4,000 $4,000 $2,000 $2,000 $0 $0 19‐20 20‐21 21‐22 22‐23 23‐24 24‐25 25‐26 26‐27 27‐28 28‐29 19‐20 20‐21 21‐22 22‐23 23‐24 24‐25 25‐26 26‐27 27‐28 28‐29 Required Renewal $6,091 $6,979 $5,691 $6,086 $6,029 $7,124 $6,002 $5,769 $13,853 $12,457 Proposed New/Upgrade $10,774 $10,719 $5,414 $9,903 $806 $696 $771 $756 $641 $1,474 Proposed Renewal $6,091 $6,979 $5,691 $6,086 $6,029 $7,124 $6,002 $5,769 $13,853 $12,457 Proposed Renewal $6,091 $6,979 $5,691 $6,086 $6,029 $7,124 $6,002 $5,769 $13,853 $12,457

Page 17 Attachment 1 Page 374 A.8 Beaches & Waterways Summary Lifecycle Management Issues Asset Condition & Risk: Asset Group Unit Qty Replacement Cost ($) • The majority of beaches and waterway assets are in very good, good or fair condition. Groynes m 2,588 4,253,668 • All City owned seawalls are currently being progressively inspected and certified by Registered Professional Engineers to determine if they are compliant with the City’s standards for beach protection structures. Sea Walls m 22,807 $125,420,636 • Boat ramps identified as being in poor to very poor condition are industrial boat ramps which have restricted access and are not accessible Revetment Walls m 54,891 $105,647,943 by the general public. Required works on these assets have been included in the capital works program. • A small number of stairs, platforms, and boardwalks were identified as at renewal intervention as part of the proactive asset inspection Showers each 272 $1,672,302 regime and have been included in the forward capital works program for renewal and/or upgrade. Platforms & Boardwalks each 151 $5,749,560 Jetties & Pontoons each 39 $6,789,317 Management & Operational Issues: • Path structures, platforms, showers, seawalls and revetment walls are often difficult to access being either completely buried or tidally Scour Protection m2 111,427 $25,064,129 inundated. Assessing their condition can be time consuming, difficult and can impact public use for large periods of time. Boat & Paddle Craft Ramps each 64 $3,564,247 Stairs each 168 $1,065,986 Asset Management Improvements: • A structural assessment of all path structures, platforms and revetment walls is required followed by the development of a dedicated Other Inventory ‐‐ $7,181,142 renewal program. TOTAL $286,408,930 • Finalise and implement Maintenance Specifications including inspection schedules and response times. • Based on analysis of condition data, document asset performance issues and trends along with the treatment options considered, leading to more refined renewal forecasts. Condition

Groynes 57% 43% End of Life Renewal Requirements for 2019-20 include: • Beaches and Waterways planning $748k Revetment Walls 2% 75% 21% 2% • Beaches and Waterways facilities and amenities including 11 showers 2019‐20 $108k • Beaches and Waterways access structures including five access structures 2019‐20 $116k Showers 19% 26% 54% 1% • Replacement of various timber sub‐structures 2019‐20 $50k

Platforms & Boardwalks 97% 3% Very Good Jetties & Pontoons 7% 79% 11% 1% 2% Good New/Upgrade Proposals for 2019-20 include: Scour Protection 18% 80% 2% Fair • Construction of a sand delivery pipeline from the Seaway Sand Bypass Jetty to southern Surfers Paradise 2019‐20 $500k, 2019‐20 to 2021‐22 Poor Boat & Paddle Craft Ramps 70% 19% 8% 3% $8.27m Very Poor • Seawall Kurrawa Park Stage 4 2019‐20 $1.17m Stairs 8% 86% 5% 1% • Commercial pontoon upgrades 2019‐20 $1m • Reconfigure the existing car trailer unit (CTU) parking facility at the Cabbage Tree Point boat ramp 2019‐20 $200k Other Inventory 48% 40% 12%

Required End of Life Renewal vs Proposed Renewal Capex Proposed End of Life Renewal & New/Upgrade Capex $5,000 $10,000 Year 5-10 renewal forecast Year 5-10 renewal forecast Year 5-10 renewal forecast $4,500 $9,000 $4,000 $8,000 $3,500 $7,000 $000

$000 $6,000 $3,000

$2,500 $5,000 $2,000 $4,000

$1,500 Expenditure $3,000 Expenditure $1,000 $2,000 $500 $1,000 $0 $0 19‐20 20‐21 21‐22 22‐23 23‐24 24‐25 25‐26 26‐27 27‐28 28‐29 19‐20 20‐21 21‐22 22‐23 23‐24 24‐25 25‐26 26‐27 27‐28 28‐29 Required Renewal $984 $2,250 $4,475 $3,259 $2,449 $2,971 $3,117 $3,197 $3,201 $3,224 Proposed New/Upgrade $3,050 $4,723 $4,210 $2,720 $3,854 $1,327 $1,594 $2,119 $2,321 $636 Proposed Renewal $984 $2,250 $4,475 $3,259 $2,449 $2,971 $3,117 $3,197 $3,201 $3,224 Proposed Renewal $984 $2,250 $4,475 $3,259 $2,449 $2,971 $3,117 $3,197 $3,201 $3,224

Page 18 Attachment 1 Page 375 A.9 Solid Waste Summary Lifecycle Management Issues 2 Landfill Sites / 12 Community waste and recycle centres Asset Condition & Risk: Asset Group Replacement Cost ($) • The majority of Waste Management assets are in Very Good, Good or Fair condition. • The weighbridge and wheel washer assets have had a detailed condition assessment and the Stapylton wheel washer will be replaced Leachate Systems and Monitoring Stations 7,410,673 during 2019‐20. Landfill Cell Liners $32,358,409 • Leachate systems and monitoring stations condition ratings are based on the age of the existing assets in the Finanaial Asset Register which do not currently represent a complete asset listing for gas wells/systems, groundwater bores, pumps. Updates to the Enterprise Asset Weighbridge & Wheel Wash Infrastructure $2,100,557 Register will be performed after the condition data site validation in Q4 FY2018‐19. Bulk Bins $2,594,990 • As part of the condition assessment outcome, some compactor renewals are planned for FY2019‐20 WRC Fixed Compactors $1,520,714 • Asset condition issues identified during ongoing condition assessments will be risk‐prioritised as part of renewals planning activities. Management & Operational Issues: Buildings and Shelters $9,690,420 • Prolonging landfill lifespans is a priority which means diverting waste from landfill by implementing new recycling street projects and Roads and Drainage $16,886,197 possible usage of other initiatives such as alternative waste disposal and re‐use technologies. Retaining Walls & Hardstands $7,010,646 Asset Management Improvements: • Enhancement of condition assessment plans will better inform future renewals planning activities. A revised budget has been proposed for Fencing, Lighting and Security $2,969,414 FY2019‐20 to condition assess the remaining portion of the Solid Waste Management portfolio. Other Equipment $2,478,182 • Improvements to the planning and delivery of maintenance will result in a reduction in unplanned maintenance activity and an increase in Mobile wheelie bins $4,523,545 proactive maintenance to reduce asset lifecycle costs over time. • Further review of the renewal funding requirements for the future 10 year period will leverage the findings of the FY2019‐20 condition TOTAL $89,543,747 assessment program. • The SCADA network is being expanded to provide more comprehensive coverage of the leachate management systems. • 2019 State Government Waste Levy has potential to divert more waste from landfills , increase recycling, and extend the life of landfill cells. Condition End of Life Renewal Requirements for 2019-20 include: Leachate Systems and Monitoring Stations 6% 44% 32% 13% 5% • Funding for Waste Recycling Centre infrastructure renewal works as determined by Solid Waste Management Infrastructure Asset Management Plan 2019‐20 $500k, 2019‐20 to 2028‐29 total $4.5 m Weighbridge & Wheel Wash Infrastructure 23% 49% 6% 6% 16% • Funding for landfill infrastructure renewal works as determined by Solid Waste Management Infrastructure Asset Management Plan 2019‐ 20 $500k, 2019‐20 to 2028‐29 total $4.5m • Bin bay safety upgrades at Reedy Creek, Helensvale, Merrimac and Springbrook Waste Recycling Centres 2019‐20 $1.2m WRC Fixed Compactors 9% 4% 47% 34% 6%

Buildings and Shelters 21% 22% 46% 10% 1% Very Good New/Upgrade Proposals for 2019-20 include: Good • Reedy Creek landfill cell 3 and 4 construction 2019‐20 $4.13 m Roads and Drainage 45% 35% 20% • Reedy Creek landfill cell 5 and Sediment Basin 2021‐22 to 2028‐29 $11.85 m Fair • Stapylton landfill cell 7 construction 2022‐23 $2.7m, 2022‐23 to 2028‐29 total $5.4m Poor • Staplyton Landfill main access upgrade 2019‐20 $575k Retaining Walls & Hardstands 55% 20% 25% • Coomera domestic vehicle waste receival facility and recycling drop off centre design and construction 2020‐21 $200k, 2020‐21 to 2028‐29 Very Poor total $17m • WRC Premium Centre Upgrade‐ $7.45 m Fencing, Lighting and Security 4% 40% 53% 3%

Other Equipment 13% 17% 68% 2%

Required End of Life Renewal vs Proposed Renewal Capex Proposed End of Life Renewal & New/Upgrade Capex $1,800 $60,000 Year 5-10 renewal forecast Year 5-10 renewal forecast Year 5-10 renewal forecast $1,600 $50,000 $1,400

$1,200 $40,000 $000 $000

$1,000 $30,000 $800

$600 $20,000 Expenditure Expenditure $400 $10,000 $200

$0 $0 19‐20 20‐21 21‐22 22‐23 23‐24 24‐25 25‐26 26‐27 27‐28 28‐29 19‐20 20‐21 21‐22 22‐23 23‐24 24‐25 25‐26 26‐27 27‐28 28‐29 Required Renewal $1,602 $1,013 $1,026 $1,040 $1,053 $1,067 $1,081 $1,095 $1,110 $1,124 Proposed New/Upgrade $11,678 $7,734 $48,763 $4,829 $16,066 $3,160 $43,230 $44,288 $0 $1,124 Proposed Renewal $1,602 $1,013 $1,026 $1,040 $1,053 $1,067 $1,081 $1,095 $1,110 $1,124 Proposed Renewal $1,602 $1,013 $1,026 $1,040 $1,053 $1,067 $1,081 $1,095 $1,110 $1,124 Page 19 773rd Council Meeting 14 May 2019 376 Special Budget & Finance Committee Meeting 13 May 2019 Adopted Report

ITEM 8 (Continued) TOTAL ASSET MANAGEMENT PLAN LG343/1045/13/01(P1)

Attachment 2 Condition Rating Descriptions

Condition Rating Scheme Generic Indicators of Maintenance / Renewal Asset Condition Action Previous Total 5 Point Total AMP Rating AMPs 2016-17 Asset is new or as new No additional Very 1 maintenance required Good Asset has no defects No renewal required Good Asset is fully functional Minor additional maintenance may be Good 2 Only minor signs of wear & tear required No renewal required Asset is functional Ongoing maintenance Obvious signs of some required Fair 3 deterioration Renewal of minor components may be required Fair Asset functionality is Substantial ongoing reduced maintenance required Number of minor defects Renewal of minor and/or Poor 4 and/or some major defects major components may Increased risk of service be required interruptions Asset functionality Renewal of major substantially reduced or components or complete not functional asset required Significant number of or Very major defects or asset has Poor 5 Asset requires disposal Poor failed Substantially increased risk of service interruptions or service interruption has occurred

Note: The 5 point condition rating scheme is generally used for undertaking condition assessments and is used in the individual Asset Management Plans.

773rd Council Meeting 14 May 2019 377 Special Budget & Finance Committee Meeting 13 May 2019 Adopted Report

ITEM 8 (Continued) TOTAL ASSET MANAGEMENT PLAN LG343/1045/13/01(P1)

Attachment 3 Asset Condition Comparative Data Comparative data on asset condition has been obtained from the below source and compared to relevant condition data in the Asset Management Plans: . Australian Local Government Association: National State of the Assets Report November 2018

Transport - Surface & Pavement Condition Rating City of Gold Coast National Average* (Sealed Roads) 1 & 2 - Very Good / Good 95% 66% 3 - Fair 4% 25% 4 & 5 – Poor / Very Poor 1% 9% Note: 1% of National Average figures was unallocated

Transport – Bridges and Major Culverts Condition Rating City of Gold National Average National Average Coast (Concrete Bridges) (Timber Bridges) 1 & 2 - Very Good & Good 86% 75% 44% 3 - Fair 11% 21% 35% 4 & 5 – Poor & Very Poor 3% 4% 21%

Flood Mitigation & Drainage Condition Rating City of Gold Coast* National Average (Stormwater) 1 & 2 - Very Good & Good 95% 67% 3 - Fair 3% 26% 4 & 5 – Poor & Very Poor 2% 7%

Sewerage and Water Supply Condition Rating City of Gold Coast National Average (Sewerage and Water Sewerage Water Supply Supply)

1 & 2 - Very Good & Good 74% 62% 66% 3 - Fair 20% 32% 25% 4 & 5 – Poor & Very Poor 6% 6% 9%

773rd Council Meeting 14 May 2019 378 Special Budget & Finance Committee Meeting 13 May 2019 Adopted Report

ITEM 8 (Continued) TOTAL ASSET MANAGEMENT PLAN LG343/1045/13/01(P1)

Attachment 3 Asset Condition Comparative Data (Continued)

Parks Recreation and Open Space Condition Rating City of Gold Coast National Average (parks and recreation)

1 & 2 - Very Good & Good 66% 61% 3 - Fair 29% 31% 4 & 5 – Poor & Very Poor 5% 8%

Community Facilities and Corporate Buildings Condition Rating City of Gold Coast National Average

Community Corporate Facilities Buildings

1 & 2 - Very Good & Good 88% 88% 61% 3 - Fair 11% 12% 31% 4 & 5 – Poor & Very Poor 1% 0% 8%

There being no further business the meeting closed at 11.37 am.

773rd Council Meeting 14 May 2019 379 Special Budget & Finance Committee Meeting 13 May 2019 Adopted Report

These Pages

Numbered 1 to 379

Constitute The Report Of The Meeting

Of The Special Budget & Finance Committee

Held Monday 13 May 2019