N O R T H S Y D N E Y C O U N C I L R E P O R T S · ITEM CLS02 REPORTS 21/03/16 N O R T H S Y D N...

ITEM CLS02 REPORTS 21/03/16

N O R T H S Y D N E Y C O U N C I L R E P O R T S

Report to General Manager Attachments:

1. NSC Community Facilities Leases and Status

2. NSC Recreational Facilities Leases and Status

SUBJECT: Council‟s Community Grants and Subsidies - Background Report

AUTHOR: Martin Ellis, Director, Community and Library Services

ENDORSED BY: Warwick Winn, General Manager

EXECUTIVE SUMMARY:

At its meeting on 7 December 2015 Council resolved:

THAT a detailed report examining Council expenditure and subsidies on Council owned properties

provided to community groups and other organisations be prepared and the report be the subject of a

Councillor Briefing in the New Year.

Council‟s most recently adopted Community Grants and Subsidies Report contains much of

the information requested and is provided with this report. Gaps in the data and the recently

completed Internal Audit of Community Properties have been reviewed in order to meet the

requirements of the resolution.

For over 30 years the North Sydney model for delivering services has been a small

community development team employed by Council working with a robust, not-for-profit

sector (parent and/or resident run) delivering services (jointly identified by Council and the

organisations) through Council facilities. Council‟s larger facilities are managed on a Joint

Plan of Management model and reported to Council annually.

A number of these leases have already expired or are to expire within 12 months. All services

identified in this report are sustainable under the current grants and subsidies, with a typical

profile showing a deficit in one year will be balanced by a small surplus in another. Reserves

are low, but sensible, allowing for liabilities to be met. Three services occupy Council

premises through annually renewed “room hire”. This is not seen as providing Council with

sufficient protection and it is recommended they be moved to a license.

Council‟s Joint Plan of Management model, and other reporting processes, have been

reviewed by Council‟s Internal Auditors and found to be sound. The auditors recommended

nevertheless that market rent for the properties is established to allow a more accurate

understanding (for Council and the community) of the subsidies by Council

FINANCIAL IMPLICATIONS:

The recommendations, with two exceptions, are fully funded in the draft estimates for Year 4

in the Delivery Plan. The exceptions are (i) the cost of drafting the three licenses and (ii) the

Report of Martin Ellis, Director, Community and Library Services

Re: Council‟s Community Grants and Subsidies - Background Report

(2)

Market Rent Review which is estimated at $30,500 +GST

Comment by Responsible Accounting Officer: Funding for the project is appropriate.

RECOMMENDATION:

1. THAT a graphic representation (publication) of Council‟s community services be

produced.

2. THAT the Community leases identified in “Attachment 1” and “Attachment 2” that are

listed as expired or are expire within 12 months or are pending be immediately renewed for

the proposed period, and otherwise on the same terms and conditions as the existing (or

negotiated) lease and Council hereby authorises its Official Seal to be affixed to the leases,

under the signature of the Mayor and the General Manager.

3. THAT the three services identified as “room hire” identified in “Attachment 1” each be

immediately granted a five year lease under the same terms and conditions as the room hire

(unless a shorter term is sought by the organisation) and that Council hereby authorises its

Official Seal to be affixed to the lease, under the signature of the Mayor and the General

Manager.

4. THAT a Market Rent review of facilities listed in “Attachment 1” is commissioned and

the results included in the Draft Community Grants and Subsidies report for 2016/17.

5. THAT the Joint Plans of Management for the community centres be updated as

recommended by the internal audit.



(3)

LINK TO DELIVERY PROGRAM

The relationship with the Delivery Program is as follows:

Direction: 4. Our Social Vitality

Outcome: 4.8 Enhanced community facilities, information and services

4.3 Enhanced arts and cultural programs and facilities

BACKGROUND

At its meeting on 7 December 2015 Council considered the issue of the appropriateness or

otherwise of allocating funds to community facilities not owned by Council.

Arising from this, Council resolved to consider a report on what funds are currently applied to

community groups in Council owned facilities.

In 2015 Council‟s Internal Auditors completed a review of the Management/reporting

Structure for Council‟s “Community Properties” and gave it a high rating of four out of five.

The Executive Summary states:

Council has developed a well-structured Plans of Management for the Community

Properties under its care and control. Generally the contents of the Plans of

Management are consistent with the Local Government Act.

There are Council adopted policies for the management of Community Facilities.

These policies provide sound control environment for operation of community centres.

The policies only cover community centres and not all open space i.e. playground and

bushland.

Council has adopted a Community Grants and Subsidies Policy. There is no

requirement at Council for reporting and measurement of rental subsidies in

Community lands. Rental subsidies are the difference between market rental appraisal

and rent paid by the lessee.

Council has a “Property Register as Required Under the Local Government Act

1993”. The register appears to be closely consistence with the legislative

requirements. Our review showed that the following information were not in the

register to be fully compliance with the Act:

The reference to title of the land;

The zoning (if any) of the land under an environmental planning instrument; and

Particulars of any agreement (including any lease or licence) entered into by the

council with respect to the land.

Our review also showed that Council has obtained insurance certificates in most

instances to ensure the lessee’s has one in place. However the current insurance

certificates are not obtained in a timely manner.



(4)

In conclusion, this report indicates an Effective Control Environment (A small

number of control risk issues mainly minor in nature / opportunities for improvement

identified).

With regard to the Community Centres’ Plans of Management:

The audit revealed that most of the Plans of Management are well developed and

consistent with the legislative requirements. A Plan of Management is in place in the

instances where we expected one to be. Section 36 of the Local Government Act

requires the Council to prepare a draft Plan of Management for community

properties. The Act requires a Plan of Management for community land which must

identify the following:

(a) The category of the land,

(b) The objectives and performance targets of the plan with respect to the

land,

(c) The means by which the council proposes to achieve the plan's objectives

and performance targets,

(d) The manner in which the council proposes to assess its performance with

respect to the plan's objectives and performance targets.

The Plans of Management have been well structured and extensive community

consultations have been engaged. Our review revealed an isolated instance of a

lease rental to for the “North Sydney Men’s Shed” had expired and not updated in

the Smoothey Park Plan of Management. We were advised that the “North Sydney

Men’s Shed” was managed through a specific Plan of Management for the building.

However, our review revealed that the Plan of Management is still in draft stage

since 2005. Subsequent to the audit we were advised that the lease agreement is

currently under negotiation with the leasee.

Expired lease information in the Plan of Management provides contradicting

information to stakeholders on the current operational use of the land. i.e. rate

payers.

With regard to the Social Subsidies Council applies the audit found:

Council’s “Community Grants and Subsidies Policy” define subsidies as ongoing

support to community services/organisations operating in the North Sydney local

government area. Council does place on public exhibition the total community

grants and subsidies allocation based on program specific functions. However, this

reporting excludes the difference between the market rental and the actual rental

collected by Council for their community properties.

Our review showed that there are a number of Councils that have also established a

policy framework on how to measure social subsidy which may be applicable to

community properties.



(5)

Excluding the difference between the market rental and the actual rental collected by

Council may not provide an objective assessment of total subsidies provided by

Council.

CONSULTATION REQUIREMENTS

Community engagement will be undertaken in accordance with Council‟s Community

Engagement Protocol.

SUSTAINABILITY STATEMENT

The following pages provide a summary of the key sustainability implications:

Category A: Centres of high local importance

Category B: Centres housing services of local and sub regional importance

Category C: Centres with the capacity to pay rent without affecting service levels

Category D: Community Housing

Category E: Aged Care Accommodation

Exclusions from this Report: Detailed commentary on recreational facilities

Category A: Centres of high local importance

These may be described as:

a) Community Based (Volunteer Board) run community centres

b) Parent run Child Care Centres and Services

c) Not for profit arts and cultural centres

All of these services have been supported by and valued in successive Social Plans

and Council‟s current Delivery Plan. All are managed through Volunteer Boards or

committees.

Many of the services were initiated by residents or via a Notice of Motion by

Councillors, and range in longevity from the Men’s Shed’s 10 years, through the

Crows Nest Centre‟s 28 years to North Sydney Community Centre’s and Kirribilli

Neighbourhood Centre’s 40 years of service each.

A number of these services share premises with other council activities, such as

Vacation Care, Playgroups and General Room Hire.

Council‟s annual contribution for „Category A‟ has for decades been:

o Provision of suitable premises at a peppercorn rent

o Building and grounds maintenance

o Capital upgrades where necessary or to achieve a strategic objective

o Trade waste removal



(6)

o Water and Council rates

o Building Insurance

o Parking subsidies

o Use of Open Space for community markets.

o Limited banner erection and bin supply to support the markets

o Cash contribution to a number of Services to enable a specific service level as

described in the Joint Plans of Management and reported to Council annually

Council‟s Annual Community Grants and Subsidies 2015/16 report identifies all

these subsidies. No market rental information is currently provided in that report.

Council‟s internal auditors have commented: “Excluding the difference between the

market rental and the actual rental collected by Council may not provide an objective

assessment of total subsidies provided by Council.”

Includes

o Crows Nest Centre

o North Sydney Community Centre;

o Kirribilli Neighbourhood Centre; (incorporating Bradfield Park Community

Centre and Centre in the Park at Forsyth Park)

o McMahons Point Community Preschool

o Kelly‟s Place Child Care Centre

o Kidsnest Occasional Care (part of Crows Nest Centre)

o Playgroups

o Neutral Bay Senior Citizens

o Primrose Park Art and Craft Centre

o North Sydney Men‟s Shed

o May Gibbs‟ Nutcote

The Children‟s Services in this Category, Kelly‟s Place Child Care Centre (30 years

old) and McMahons Point Community Preschool (10 years), are both initiatives of

Council. Both are parent run and very affordable in comparison with other similar

services. The former is in an old but serviceable building; the latter in a moderate one

with poor playground facilities. In both, the care standard is high with dedicated staff

and Parents committees.

As part of its Parraween Street project Council has been investigating temporary

premises for the Early Childhood Centre at Cremorne while construction takes place.

Due to the recent departure of a long term tenant from Level 4 of the Crows Nest

Centre it is now possible for the Early Childhood Services to share this space with

other community services. The proposal has the support of the Director of Engineering

and Property Services and the Crows Nest Centre Manager has indicated a willingness

to support the arrangement through joint management.

Category B: Centres housing services of local and sub regional importance

These are significant services delivered by large organisations, identified through

Social Planning processes. They are recruited and retained through the provision of:

o Suitable premises at a peppercorn rent

o Building maintenance

o Capital upgrades where necessary or to achieve a strategic objective



(7)




o Parking subsidies (where relevant)

There is no cash contribution.

They are important services for the North Sydney Community and it is considered

unlikely or at best problematic whether or not that they would be based in North

Sydney without this inducement.

Includes:

o NSW Health‟s Early Childhood Centre (most of Cremorne Community

Centre) - 50 years

o NSW Health‟s Early Childhood centre (small part of Crows Nest Centre) - 50

years

o Relationships Australia (Room in Neutral Bay Community Centre) - 10 years

o Early Ed (services for children with disabilities). Small building in

Cunningham Street - 30 years

Category C: Centres with the capacity to pay rent without affecting service levels

These pay rent and are primarily children‟s services. Council‟s Children’s Services

Strategic Plan identifies the three qualities of desired Children‟s Services for Council

facilities as being Affordable, High Quality and Not–for-profit. Council‟s

contribution is:

o Suitable premises charged a rent (historically set) and increased annually each

year by CPI.

o Building and (where applicable) grounds maintenance




o Parking subsidies

There is no cash contribution (except for rare, small, one-off projects for Kidsnest).

This category is for organisations that serve working parents, where a reasonable

capacity to raise fees to meet costs can be relied on.

The Lower North Shore Community Transport office is included here but could just as

correctly be placed in Category B (Centres housing services of local and sub

regional importance) as historically they have also managed to pay rent, through it is

more their scale than ready access to fee rises that provides this capacity.

Includes:

o Kindergarten Union (KU) Preschool at Kendall Community Centre

o Kindergarten Union (KU) Preschool at North Sydney Oval (Grandstand

Kindergarten)

o Cammeray Children‟s Centre (Long Day Care) at Kendall Community Centre

o Montessori Preschool at Forsyth Park Community Centre

o Community Transport Lower North Shore



(8)

Conclusion for Categories A, B and C

Council’s network of community spaces and the services they offer has flourished over a long

period, and it may be therefore thought strange to call it radical and innovative, but that is a

fair and just description. The result is a rich and highly accessible group of public spaces,

often filled with residents, workers and visitors 7 days and nights a week all year round. They

bring the North Sydney community out of our homes and offices together into public spaces,

engendering the sense of community that we know.

Category D Community Housing

Council‟s portfolio of 22 properties is guided by its Affordable Housing Strategy 2015. All

are joint ventures, through land or building or both, either with Housing NSW as Manager [or

the Land Housing Corporation (LAHC) as the legal entity] or with Link Housing. Some of the

leases to Housing NSW have been sub-leased, as is now State Government Policy, to the local

Community Housing Manager, in our case, Link Housing. Some of these subleases are now

on a month to month basis as LAHC considers its position on Joint Ventures.

The properties are generally on long leases (some to 2044) with outgoings (maintenance rates

etc) the responsibility of the lessee (LAHC and Link).

Council‟s proposed development at Parraween Street represents its first venture into Key

Worker housing, to complement its earlier contribution to social housing.

Finally, Council has reinforced its priority of access for North Sydney residents through a 5

year Management Agreement July 2012- June 2017 with Link Housing. This is in addition to

and complimentary to the leases. This plan needs to be updated this year with the completion

of the New Generation Boarding House in Wollstonecraft.

Conclusion for Category D

Council’s Affordable Housing Strategy 2015, recently adopted, identified all the important

issues and has strategies in place to address them. Council activity in this area on behalf its

most vulnerable residents and its recent activities towards supporting key workers, is sound

and strategically based.

Category E: Aged Care Accommodation

Council‟s involvement in the only existing large scale Aged Care Accommodation facility in

the LGA is as part land owner and (potentially) Board member (2 positions): James Milson

Village (JMV), an independent living and nursing home facility. Council has no financial

obligations arising from this relationship, and enjoys the fulfillment of its social objectives in

aged care as expressed in the Delivery Plan, through the Joint Venture with the North Sydney

Retirement Trust.

A second Joint venture currently exists on the site, between Uniting Care Ageing (owner of a

long lease on the Nursing Home) and the North Sydney Retirement Trust.

Conclusion for Category E



(9)

Council need have no concern about the lease of its land for JMV as it is current to 2088. The

issue that is of considerable community interest is any proposed development given the

importance of Aged Care accommodation, its paucity in North Sydney and the ongoing Aged

Care Reform Agenda.

Exclusions from this Report: detailed commentary on recreational facilities

o Cammeray Golf Club*

o Cammeray Croquet Club*

o Indoor Sports Centre (Northern Suburbs Basketball Association*)

o Primrose Park Tennis Centre

o Cammeray Tennis Centre (Ernest Street)

o Rooftop Tennis Centre (Ridge Street)

o North Sydney Olympic Pool Creche

Brief Comment: this portfolio also represents a remarkable asset for the North Sydney

Community and also involves (some*) not-for-profit, community based organisations in

Council facilities. They have not been discussed at length in this report as they do not receive

cash subsidies, were not the subject of the Internal Audit and have traditionally, with two

exceptions, not been reported on through the Community Grants and Subsidies Report.

The first exception is in the Indoor Sports Centre, which by virtue of its parking subsidy has

been captured in the grants and subsidies report; the second is the Pool’s crèche, which is

reported as subsidised but there is no lease involved.

While all these recreational facilities pay rent, Market Rents have not been established and so

it cannot be said whether or not they are subsidised (apart from parking and child care).

CLS02 Attach 1 Community Grants Background Report

Category Facility/Tenant Shared/exclusive? Lease/period Status Proposed

A Crows Nest Centre (in CNC) (PART) Exclusive use 1/7/2014-30/6/2019Pending (not yet released) Renew 5 years

A North Sydney Community Centre Shared (Vac Care) 01/05/2011-30/04/2021 Current n/a

A Kirribilli Neighbourhood Centre (KNC) Exclusive use 01/01/2016-31/12/2020 Current n/a

ABradfield Park Community Centre (KNC) (PART) Exclusive use 01/01/2011-31/12/2015

Relocate in July 2016 n/a

ACentre in the Park (KNC) (Forsyth Park Scout Hall) Exclusive use 2016 only Room Hire Lease 5 years

A Primrose Park Art and Craft Centre Exclusive use

01/01/2013-31/12/2015 - New lease being finalised

to 31/12/2020 Pending Renew 5 years

A Men’s Shed (Smoothey Park Scout Hall) Exclusive use

01/01/2011-31/12/2015 - New lease being negotiated

to 31/12/2020 Pending Renew 5 years

A May Gibbs’ Nutcote Exclusive use 01/05/08 – 30/4/23 Current n/a

A Kelly’s Place Child Care Centre Exclusive use 01/09/2014-31/08/2016 Current Renew 5 years

AMcMahons Point Community Preschool (PART) Exclusive use 2013- April 2016

Expires within 12 months Renew 5 years

ANeutral Bay Community Centre (PART) Seniors Room Exclusive use 2016 only Room Hire Lease 5 years

B Early Childhood Centre (in CNC) (PART) Exclusive use n/a n/a Lease 5 years

B Early Ed Clinic - Cunningham St Exclusive use 01/09/2011-31/08/2021 Current n/a

B Early Childhood Centre - Cremorne (PART) Shared n/a n/a Lease 5 years

BNeutral Bay Community Centre (PART) Relationships Australia Exclusive use 2016 only Room Hire Lease 5 years

ATTACHMENT TO CLS02 - 21/03/16



C Kidnest Occ. care (in CNC) (PART) Exclusive use 01/07/14-30/06/16Expires within

12 months2 Years + 2 year

option

C Kendall C Centre (KU Preschool) Exclusive use 01/01/2011-31/12/2015 Expired Renew 5 years

CKendall C Centre (Cammeray Childrens Centre) Parent run Shared (bookings) 16/04/2012-15/04/2017 Current n/a

C North Sydney Oval (KU Preschool) Shared (Vac Care) 01/01/2011-31/12/15 Expired Renew 5 years

C Forsyth Park (Montessori Preschool) (PART) Shared (Vac Care) 01/01/2015-31/12/16Expires within

12 months Renew 5 years

CLower North Shore Community Transport (in CNC) (PART) Exclusive use

01/07/2010-30/06/2015 New 5 year lease being

negotiated. Pending Renew 5 years

EJames Milson Village (PART) North Sydney Retirement Trust Exclusive Use 01/08/1999-31/12/2088 Current n/a




Rec Cammeray Golf ClubShared (Tees and Greens

are leased) 1/6/06-51/5/2026 Current

Rec Cammeray Croquet Club Exclusive use 1/1/07-31/12/16Expires within

12 months Renew 5 + 5 years

RecIndoor Sports Centre (Northern Suburbs Basketball Association) Exclusive use 15/9/08-14/9/28 Current

Rec Primrose Park Tennis Centre Exclusive use 1/4/02-31/3/22 Current

Rec Cammeray Tennis Centre (Ernest Street) Exclusive use 1/7/07-30/6/17 Current

Rec Rooftop Tennis Centre (Ridge Street) Exclusive use 1/1/015-31/12/24 Current


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