Agenda of Finance Policy Committee

ORANGE CITY COUNCIL

MINUTES OF THE

Audit and Risk Management Committee

HELD IN Committee Room 3, Civic Centre, Byng Street, Orange

ON 4 September 2015

COMMENCING AT 9.00AM

1 Introduction

Attendance

Mr P Burgett (Chairperson), Cr C Gryllis (Deputy Mayor), Mr A Fletcher, Acting General Manager (Chris Devitt), Director Corporate and Commercial Services, Manager Financial Services, Manager Administration and Governance, Internal Auditor, Mr J O’Malley (External Audit Partner - Intentus Chartered Accountants)

1.1 Apologies and Leave of Absence

RESOLVED Cr C Gryllis/Mr A Fletcher

That the apologies be accepted from Cr J Davis (Mayor) and the General Manager for the Audit and Risk Management Committee meeting on 4 September 2015.

1.2 Acknowledgement of Country

1.3 Declaration of pecuniary interests, significant non-pecuniary interests and less than significant non-pecuniary interests

Nil

2 Previous Minutes

RESOLVED Mr A Fletcher/Cr C Gryllis

That the Minutes of the Meeting of the Audit and Risk Management Committee held on 5 June 2015 (copies of which were circulated to all members) be and are hereby confirmed as a true and accurate record of the proceedings of the Audit and Risk Management Committee meeting held on 5 June 2015.

MATTERS ARISING

RECOMMENDATION Cr C Gryllis/Mr A Fletcher

1 That management provide a report to the next meeting showing an analysis of wages and a commentary on related risks of financial sustainability.

2 That management provide a report to the next meeting highlighting the progress and risks associated with the Orange Regional Museum project.

3 General Reports

3.1 Audit and Risk Management Committee Action List as at August 2015

TRIM Reference: 2015/2185

Recommendation Cr C Gryllis/Mr A Fletcher

1 That the report by the Internal Auditor on ARMC Action List as at August 2015 be acknowledged.

2 That action items marked as completed be deleted from the ARMC Action List.

3 That in relation to action item number 2012A02.01, arrangements be made for the Committee members to visit the following Council sites: Macquarie pipeline; Orange Airport; Museum; storm water recycling project; and any other major Council projects of interest to the Committee.

4 That in relation to action item number 2014A11.03, management provide a report of risk issues arising out of “health checks” carried out by Civica.

3.2 2014/2015 Financial Reports

TRIM Reference: 2015/2206

Recommendation Cr C Gryllis/Mr A Fletcher

That the report on Council’s Draft 2014/15 Financial Reports be noted.

**The External Auditor left the meeting, the time being 10.00am**

3.3 Internal Audit Review Report - Cash Receipting Process

TRIM Reference: 2015/2144

Recommendation Cr C Gryllis/Mr A Fletcher

1 That the report be acknowledged.

2 That in future a summarised report of all issues identified and resolved before the audit report is finalised be submittted to the Committee.

3 That issues which inlcude elements that are not yet concluded but where the item is marked closed in the report be listed in the ARMC Action List.

4 That in future all agreed management action items be listed separately in order to separate closed issues from open items.

3.4 Internal Audit Review Report - Accounts Receivable Process

TRIM Reference: 2015/2156

Recommendation Cr C Gryllis/Mr A Fletcher

The Committee notes that following the initial review of accounts receivable undertaken by the Internal Auditor, given no major benefits were identified, that the full review not proceed.

3.5 Priority Corporate Risks

TRIM Reference: 2015/2188

Recommendation Mr A Fletcher/Cr C Gryllis

1 That the information provided in the report on priority corporate risks be acknowledged.

2 That the corporate risks register including inherent risk ratings be provided to the next meeting.

3 That the definition of “residual risk” in the Council Enterprise Risk Management Tool-kit be revised to more clearly articulate the way the risk management system operates to determine the “residual risk”.

3.6 Internal Audit Plan - Revision of Plan for 2015/16 - 2017/18

TRIM Reference: 2015/2175

Recommendation Mr A Fletcher/Cr C Gryllis

1 That the Audit and Risk Management Committee recommend the revised Internal Audit Plan for adoption.

2 That the inherent risk rating for each audit area be included in the proposed internal audit programme.

3 That the audit of development applications be brought forward to the 2015/16 financial year – and deferring the audit of Work Health and Safety Compliance review to 2016/17.

3.7 Review of the Audit and Risk Management Committee Charter

TRIM Reference: 2015/2184

Recommendation Mr A Fletcher/Cr C Gryllis

That the Committee proposes no amendments to the ARMC Charter and recommends it to Council for adoption.

3.8 Internal Audit Charter Operational Policy OP081

TRIM Reference: 2015/2251

Recommendation Cr C Gryllis/Mr A Fletcher

That the Committee confirms the proposed minor changes to Operational Policy OP081 Internal Audit Activity Charter as circulated and recommends it to the General Manager for adoption.

Other Business

It was noted that Dubbo City Council has requested the Internal Auditor to investigate the possibility of acquiring specialist audit software such as ACL (Audit Command Language) to facilitate the data analytics audit techniques. The Committee asked that the investigation consider compatibility of such software with the Council’s software systems and potential costs and benefit to Orange City Council.

The Meeting Closed at 11.15AM.

Finance Policy Committee 6 October 2015

3.2 Combined Rates and Charges Interim Reconciliation as at 16 September 2015

TRIM REFERENCE: 2015/2466

AUTHOR: John Kennedy, Senior Revenue Officer - Rates

EXECUTIVE Summary

The following tables and graphs provide details of Rates, Water, Sewer and Garbage Charges raised and collected up to the first quarter of the 2015/16 rating year.

Link To Delivery/OPerational Plan

The recommendation in this report relates to the Delivery/Operational Plan strategy “1.2 Our City - Information and advice provided for the decision-making process will be succinct, reasoned, accurate, timely and balanced”.

Financial Implications

Nil

Policy and Governance Implications

Nil

Recommendation

That the information provided in the report by the Senior Revenue Officer Rates on Combined Rates and Charges Interim Reconciliation as at 16 September 2015 be acknowledged.

further considerations

Consideration has been given to the recommendation’s impact on Council’s service delivery; image and reputation; political; environmental; health and safety; employees; stakeholders and project management; and no further implications or risks have been identified.

SUPPORTING INFORMATION

The following report gives details of the combined rates and charges reconciliation as at 16 September 2015. As at that date $5,923,114.21 or 32.59% remains outstanding. As at 19 September 2014, 33.06% of the amount payable remained outstanding.

Debt Collection – Rates

Debt recovery for overdue rates for the 2014/15 year resulted in 1,266 accounts with a total value of $1,911,057.32 being referred to Council’s collection agents to be issued with 7 Day Letters of Demand for rates arrears balances with two or more instalments outstanding.

As at 16 September 2015, 1,063 accounts with payments totalling $1,479,845.52 have been finalised or action completed after being issued with 7 day letters in 2014/15.

The remaining 203 accounts with debt balances totalling $431,211.80 have either had action held following negotiation of a suitable arrangement for payment or have been referred to Council’s Collection Agents for progression to the next stages in the debt recovery process.

Debt recovery for overdue rates for the 2015/16 year has commenced with 256 Letters of Demand with a total value of $365,929.39 being issued for accounts with two or more instalments overdue. As at 16 September 2015, 25 accounts have been finalised with payments totalling $36,877.53.

General Rates	Ordinary Rates YTD 1st Quarter
	2014/2015	2015/2016
	$	$
Balance Outstanding	1,509,321.48	1,029,847.08

Sewer Charges	Sewer Charges YTD 1st Quarter
	2014/2015	2015/2016
	$	$
Balance Outstanding	1,011,124.99	1,083,204.91

Water Charges	Water Charges YTD 1st Quarter
	2014/2015	2015/2016
	$	$
Balance Outstanding	3,120,898.67	3,670,782.54

Garbage and Recycling Charges	Garbage Charges YTD 1st Quarter
	2014/2015	2015/2016
	$	$
Balance Outstanding	214,792.86	139,279.68

Finance Policy Committee 6 October 2015

3.3 Request for Financial Assistance

TRIM REFERENCE: 2015/2505

AUTHOR: Josie Sanders, Management Accountant

EXECUTIVE Summary

Council is in receipt of requests for financial assistance under section 356 of the Local Government Act 1993.

Link To Delivery/OPerational Plan

The recommendation in this report relates to the Delivery/Operational Plan strategy “3.3 Our City – Recognise that members of the community will take different leadership pathways, the Council will support this growth and development through appropriate activities, initiatives and assistance”.

Financial Implications

If Council resolves as per recommendations of this report, the following balances remain in the 2015/2016 budget.

Program	Adopted Budget	Actual/Committed	Remaining balance
General Donations	108,305	108,305*	Nil
Major Promotions	30,900	28,019	2,881
Sports Participant	13,900	5,450	8,450
Sports Facility	50,000	50,000	Nil

*NB: Includes 20 x $100 reserved for school prize giving

Policy and Governance Implications

Nil

Recommendation

1 That Council approve the request from Rotary Club of Orange – Calare for drug prevention , to be funded from funds allocated specifically for drug prevention programs.

2 That Council decline the requests from Mojo Events $603, TEDxOrange $4,500, ODEEP $280, and Rotary Club of Orange – Daybreak $650, as the General Donations budget has been fully expended.

3 That Council decline the request of $1,200 from CYMS, as Council has already provided in-kind support of $750 for painting of emblems on the field prior to the grand final.

4 That Council decline the deferred request from Orange Local Ability Links Program, as the General Donations budget has been fully expended.

further considerations

SUPPORTING INFORMATION

Council, at its meeting of 15 September 2015 deferred a request from Orange Local Ability Links Program, for the waiver of pool fees at the Orange Aquatic Centre. Council staff have had further discussions with the applicant, and have confirmed that this organisation is funded by the State Government. However, the applicant was still unable to provide Council with the number of users, and frequency of use anticipated at the Orange Aquatic Centre.

Attachments

1 Donation Table 6/10/15, D15/36095 ⇩

2 Rotary Club of Orange - Calare, IC15/14249 ⇩

3 Mojo Events - Crafted Live, IC15/14242 ⇩

4 TEDxOrange, IC15/13033 ⇩

5 TEDxOrange - Additional Information, IC15/13531 ⇩

6 Orange & District Early Education Program (ODEEP), IC15/13472 ⇩

7 Rotarty Club of Orange - Daybreak, IC15/12858 ⇩

8 Orange Local Ability Links Program, IC15/12708 ⇩

9 Orange CYMS Rugby League Club, IC15/13634 ⇩

Finance Policy Committee 6 October 2015

3.3 Request for Financial Assistance

Attachment 1 Donation Table 6/10/15

No	Applicant	Amount Sought	Policy Position	Purpose	Comment	Recommendation	To be advertised
A.1	Rotary Club of Orange – Calare	$550	Miscellaneous Request – max of $500	Production of DVD/Thumb drive on Ice – Drug Prevention Program to be distributed to schools, sporting and community organisations	Council has funding available to be used for Drug Prevention programs	Yes	No
A.2	Mojo Events & Promotions	$603	Reduction in Council Venue Hire Fees – 50% to a maximum of $500	Crafted Live – Brewed event to be held 4/5 Mar 2016. To promote craft beer, cider and meat.	Budget fully expended	Nil	Yes
A.3	TEDxOrange 2015	$4,500	Community Event- Seed Funding To a maximum of $1,000	TEDxOrange established to promote “Thought leaders” An event is organised for the 20 Nov 2015 at the Orange Regional Conservatorium	Budget fully expended	Nil	No
A.4	Orange & District Early Education Program (ODEEP)	$280	Reduction in Council Venue Hire Fees	ODEEP are requesting 1 hr aquatic physiotherapy for one child, caregiver and physiotherapist for 20 weeks	Budget fully expended, and Council has already provided financial support this financial year of $3,000	Nil	No
A.5	Rotary Club of Orange Daybreak	$650	Reduction in Council Venue Hire Fees – 50% to a maximum of $500	2015 Central West Wellness Summit to be held 22 Nov 2015 at the Orange Function Centre	Budget fully expended	Nil	No
A.6	Orange Local Ability Links Program	Not Specified	Reduction of Fees – 50% to a max of $500	Waiver of pool entry fees and admission to Water Aerobics. Applicant was unable to specify the number of users and the frequency of use.	Budget fully expended.	Nil	No

Applicant

Amount Sought

Policy Position

Purpose

Comment

Recommendation

To be advertised

B.1

Orange CYMS Rugby League Club

$1,200

Sponsorship to a max of $5,000

Hosting of Group 10 Grand final event, held on the 13 Sept 2015 at Wade Park.

Council has already donated in-kind support to the value of $750 for the painting of emblems on the field

Nil

Finance Policy Committee 6 October 2015

3.3 Request for Financial Assistance

Attachment 4 TEDxOrange

ORANGE CITY COUNCIL DONATIONS AND GRANTS

APPLICATION

Orange Colour CATEGORY SELECTION - TICK ONE ONLY

£	Category 1 – Rate Reimbursement – Not for Profit organisations only – applies to general rates only – considered annually

Category 2 – Sports Participant Program – considered quarterly - select one only from the following:
£	Individual Excellence in sporting achievement
£	Regional/State representative – Individual
£	Regional/State representative – Group/team
£	National/International representative – Individual
£	National/International representative – Group/team

£	Category 3 – Annual allocation – considered annually - Up to $3,000 (ex GST)

£	Category 4 – Sports Facilities Program – considered annually

Category 5 – General requests – considered quarterly – select one only from the following:
£	Excellence in educational – Individual
£	Prize giving – per school/organisation
£	Reduction in Council Venue hire fees
£	Miscellaneous
Ñ	Community event – seed funding – event must be managed by a not for profit or community group

£	Category 6 – Sponsorship – to maximum of $5,000 (ex GST) per organisation/event – considered quarterly

£	Category 7 – Heritage Assistance Fund

Information Required For All Category Applications

APPLICANT’S DETAILS – ALL APPLICANTS ARE TO COMPLETE THIS SECTION

Name of organisation seeking funding

TEDxOrange 2015

Address

c/o PO Box 580

ORANGE NSW 2800

Postal Address (if different from above)

As above

Name and position of the contact person

Kyle Manning, Founder and Licensee, TEDxOrange 2015

Kath Logan, Founder TEDxOrange 2015

Phone (mobiles only) Kyle

Kath

0417 687 762

0416 083 884

Email

kyle@manningpr.com.au

kathrynlogan@bigpond.com

What legal status does your organisation have? (eg Incorporated, Association, etc.) If not for profit please attach evidence – such as charter/constitution showing no personal gain will be available to members, charitable status advice or a statutory declaration

Event operated under license from TED (license conditions attached). License holder - Kyle Manning

ABN (if applicable) n/a

ACN (If applicable) n/a

Description of organisation and its purpose

TED is a global non-profit organization devoted to ideas worth spreading. Its two annual global conferences feature thought leaders talking about ideas worth spreading. Those talks are recorded and made available for anyone to watch on the TED website. Some of those talks have been viewed millions of times by viewers all over the world.

TEDx is a program of local, self-organized events that aim to spark deep discussion and connection by bringing local people together to listen to thought leaders speaking (live and TEDTalks videos).

TEDx has bias-free programming - you won’t be seeing speakers who have commercial, religious or political agendas.

Orange has lots of smart, innovative people who have ideas worth spreading.

We established TEDxOrange to give those people local and global coverage, as well as establishing the city as the home of thought leaders.

Description of the event/project, where will the event be held, what is the expected impact.

The first ever TEDxOrange will happen on Friday 20 November 2015 at the Orange Regional Conservatorium. TEDxOrange is a full-day event with a live audience of 100 people - that’s all the TEDx license will allow.

Our theme is localization and our goal is to bring together thought leaders - out of towners and locals - to share ideas worth spreading. We want to surprise and delight our audiences, talk about different ways of doing the things that matter and provoke conversations that make change.

But for us, TEDxOrange is a lot bigger than just the conference room. There’s been so much interest from our community that we’ll be sharing the event with everyone who wants to be part of it.

We’ll be live streaming on the day so that, wherever they are, people can watch or groups can hold informal TEDx Live gatherings at home, school or work.

After the event, videos of each speaker and musician will go up on the TEDxOrange website, the TEDx YouTube channel and the TED website.

The bulk of our budget ($38 000) is being spent on the website, high capacity streaming on the day and making broadcast quality recordings of each TEDx talk so that Orange’s ideas worth spreading can be enjoyed locally and globally.

See www.TEDxOrange.com.au

What is the time frame of your project?

Start Date: 20 November 2015

End Date: 20 November 2015

What are the project costs?

Total project costs: $ est 52 000 (ex GST)

Amount seeking from Council in cash: $ 4500 (Ex GST)

Are you seeking any in-kind support from Council? If so, please identify the services required:

In addition to financial support, TEDxOrange would like to work with Council to present TEDxLive in Council venues on Friday 20 November 2015.

If you are applying under categories 3, 4 or 6, you must complete the following section to illustrate matching $ for $ from your organisation. For other categories a demonstration of your cash contribution would be favourably assessed.

What is the cash amount you/your organisation will be contributing? $ 8 000 (ex GST)

What, if any, is the in-kind amount you/your organisation will be contributing? $ 39 500 (raised from other sponsors)

~~If you are applying for funding for a capital project (equipment purchase, building or property improvements etc.) please complete the following section.~~

~~If yes to this item, you must attach three (3) quotations to the application form~~

~~Circle one:~~

~~Yes No~~

ALIGNMENT TO THE COUNCIL’S STRATEGIC COMMUNITY PLAN

Council must align its expenditure to the directions in the Community Strategic Plan (CSP).

Copies of the plan are available at Council offices, Libraries and on the Council website orange.nsw.gov.au. The CSP lists the directions and their associated strategies and objectives in detail and should be consulted to ensure you link your application to the appropriate element. This element will substantially strengthen your application.

Which direction from Council’s Community Strategic Plan (CSP) does your application best align to? – select one from Our City, Our Community, Our Economy or Our Environment.:

OUR CITY

The Orange community will embrace and support strong, accountable leadership to ensure effective, long term, inclusive planning and decision making within the region

Having consulted the Community Strategic Plan, which strategies in the Our City Section does your project support? List the numbers of the strategies only.

List numbers:

OUR COMMUNITY

The Orange community will support and enhance a healthy, safe and liveable city with a range of recreational, cultural and community services to cater for a diverse population.

Having consulted the Community Strategic Plan, which strategies in the Our Community Section does your project support? List the numbers of the strategies only.

List numbers:

5, 6, 8, 9

OUR ECONOMY

The Orange community will plan and grow an innovative, diverse and balanced economy which protecting the character of the City and the region

Having consulted the Community Strategic Plan, which strategies in the Our Economy Section does your project support? List the numbers of the strategies only.

List numbers:

10, 11

OUR ENVIRONMENT

The Orange community will pursue the balance of growth and development and the protect and enhancement of the built and natural environment while recognising climate impact and the diverse needs of the urban, village and rural communities

Having consulted the Community Strategic Plan, which strategies in the Our Environment Section does your project support? List the numbers of the strategies only.

List numbers:

Are you using any local businesses?

This will assist in demonstrating the local benefit of your project to other members of our community. Using local services will significantly strengthen your application.

If an acquittal is required you will need to confirm the level of expenditure to local businesses compared to the level you identify here and also provide evidence that payment has been made to these businesses.

Engaging with local businesses will assist in a favourable assessment of your application.

Business name	What service will they provide?	Estimated amount to be paid to them (Ex GST)
Colton Computer Services	Audio visual	$13 500
Other local businesses are providing in-kind services

Will your project create any jobs – either short or long term?

Estimated long term full time jobs to be created: 0

Estimated short term (up to 6 months) jobs to be created: 0

DECLARATION – ALL applicants are to complete this section

On behalf of TEDxOrange, I declare that the information provided above is complete and correct

___________________________________________________________________________

Kathryn Logan, Founder TEDxOrange 2015

1 September 2015

THE INFORMATION YOU PROVIDE IS PERSONAL INFORMATION FOR THE PURPOSES OF THE PRIVACY AND PERSONAL INFORMATION PROTECTION ACT 1998. THE SUPPLY OF THE INFORMATION BY YOU IS VOLUNTARY. IF YOU CANNOT PROVIDE OR DO NOT WISH TO PROVIDE THE INFORMATION SOUGHT, YOUR APPLICATION MAY BE UNABLE TO BE PROCESSED. THIS PERSONAL INFORMATION IS BEING COLLECTED FROM YOU IN ORDER TO PROCESS YOUR APPLICATION.

Finance Policy Committee 6 October 2015

3.4 Request for Financial Assistance - New Years Eve Party Under the Stars 2015

TRIM REFERENCE: 2015/2539

AUTHOR: Sharon D'Elboux, Manager Business Development

EXECUTIVE Summary

Council is in receipt of a request for financial assistance from McCormack Barber under section 356 of the Local Government Act 1993.

Link To Delivery/OPerational Plan

The recommendation in this report relates to the Delivery/Operational Plan strategy “10.2 Our Economy – Facilitate and support the attraction and development of events, festivals, venues and activities for residents and visitors, ensuring access and participation for older people”.

Financial Implications

Council’s current Delivery/Operational Plan includes an allocation to the New Year’s Eve event of $10,300. Council’s General donations budget for the current year is fully expended.

Policy and Governance Implications

Nil

Recommendation

1 That Council decline the request from McCormack Barber of $20,000 on the basis that $10,300 has already been allocated by Council.

2 The Council liaise with McCormack Barber to identify opportunities where in-kind support for the event could be provided by Council staff.

further considerations

SUPPORTING INFORMATION

Since 2011, an annual New Year’s Eve community event has been held in Orange. It is alcohol free and family focused. The event is well attended with an estimated 5,000 people participating. Orange City Council has offered event sponsorship over the past three years.

In 2011 in a submission prior to the first year, the event organisers provided the following:

“It is estimated that, although a full commitment of $30,000.00 would be needed in the first year of the event, $20,000.00 would be required in 2012 and $10,000.00 in 2013. The goal is to make the event self-funding in the fourth year.”

It is noted that the event at that time of this undertaking was not hosted by McCormack Barber the current organiser.

The Council funding for the event has been:

Year	Payee	Amount
2011/12	Simon John Events	$28,000
2012/13	McCormack Barber Real Estate	$31,000
2013/14	McCormack Barber Real Estate	$30,000
2014/15	Manning Public Relations	$30,000

It is anticipated that if Council provides in-kind support and savings are identified for this year’s event then an event pitched at a similar level to previous years could proceed this year limiting Council’s financial contribution to that already budgeted.

The level of support provided would be clarified in writing to McCormack Barber.

McCormack Barber has notified Council that the services of Manning PR and Events will not be available for the proposed 2015 event. Instead McCormack Barber is seeking increased support from Orange City Council to deliver this event.

Council’s current budget provides funding for this event of $10,300. Under the section 356 donations and grants allocation, all funds have been allocated.

It may be possible for Council’s staff to provide in-kind assistance in the delivery of this event. The level of support to be provided would be clarified in writing with McCormack Barber.

Attachments

1 Request Donation Form - McCormack Barber - Party Under the Stars - NYE Event 2015, D15/36622 ⇩

2 Request Donation Letter - McCormack Barber - Party Under the Stars - 31 December 2015, IC15/13468 ⇩

3 Event Report - Party under the Stars - Waratah Sports Ground - 31 December 2015, IC15/7229 ⇩

Finance Policy Committee 6 October 2015

3.5 Request for Interest Free Loan - Orange Theatre Company

TRIM REFERENCE: 2015/2526

AUTHOR: Aaron Jones, Manager Financial Services

EXECUTIVE Summary

This report seeks Council’s consideration of an application from the Orange Theatre Company for an interest free loan from Council for the construction of an additional storage shed adjacent to their existing shed in Margaret Street, Orange.

The shed has been completed, with the Orange Theatre Company now seeking Council’s assistance to cover the costs of construction.

Link To Delivery/OPerational Plan

Financial Implications

Council’s policy on the Provision of Interest Free Loans to Community Organisations (ST004) requires that “Council’s total exposure to loan and loan guarantee commitments shall be capped at an amount no greater than one percent (1.0%) of the annual revenue from Rates & Charges” (emphasis added). With the existing loan and loan guarantee commitments, Council’s total exposure already exceeds the limit set by this policy, however it should be noted that this Policy was established after the existing loan and loan guarantee commitments were entered into. Should Council resolve to approve the request from the Orange Theatre Company, Council’s total exposure would increase to 3.1% (2.1% over the Policy limit).

Council’s Policy also requires that an update on Council’s Financial Position, including investments, is to be provided to Council prior to the consideration of any new application for an interest free loan. Following the conclusion of the audit of Council’s financial position for the year ended 30 June 2015, Council’s external auditors established that Council is in a “strong financial position”. At this time Council was holding $119,454,000 in total Cash, Cash Equivalents and Investments, of which $109,244,000 was being held as “restricted”. Council’s most recent report on its monthly Statement of Investments was presented to the Council meeting of 15 September 2015. In this report, it was disclosed that the total of Council’s investment portfolio, as at 31 August 2015, amounted to $119,875,703.04 and was producing an average interest rate of 3.56%.

Policy and Governance Implications

Nil

Recommendation

That Council decline the request from the Orange Theatre Company for an interest free loan.

further considerations

The recommendation of this report has been assessed against Council’s other key risk categories and the following comments are provided:

Service Delivery

Council’s policy on the Provision of Interest Free Loans to Community Organisations (ST004) provides a risk mitigation control in establishing an upper limit of Council’s exposure to risk arising from loan and loan guarantee commitments. Whilst it is acknowledged that Council has currently exceeded this upper limit, approval of this current request would result in Council being exposed to a greater risk.

SUPPORTING INFORMATION

The Orange Theatre Company are nearing the completion of the construction of an additional storage shed (approved via DA 57/2015) adjacent to their existing shed on a Council owned parcel of land on Margaret Street, Orange (adjacent to Council’s Works Depot).

The total cost of this shed is approximately $110,000, and the Orange Theatre Company are seeking an interest free loan from Council for $60,000 to assist in the financing of this project. The Orange Theatre Company has proposed to repay the loan over a four year period.

Council’s policy on the Provision of Interest Free Loans to Community Organisations (ST004) establishes a number of criteria which must be submitted in the application for such a request. A copy of the initial application received from the Orange Theatre Company, and a copy of the additional information that was later submitted, have been provided as attachments to this report. Following is a summary of the application’s assessment against the criteria established by the Policy.

1 The project or facility which is the subject of the application must be located on Council owned, or Council controlled land.

The new storage shed has been constructed on a parcel of land owned by Council.

2 The period of repayment of the loan will be within a term generally not exceeding five years.

The Orange Theatre Company has proposed a term of four years.

3 Priority will be given to applications for a project or facility which:

i. Is available uniformly to all persons or to a significant number of persons within the Council’s area AND

ii. Includes a contribution of funds by the applicant either in cash or in-kind.

The shed will be utilised by the members of the Orange Theatre Company for the storage of props and costumes. The new shed will allow space to be freed up in their existing shed for the manufacture of scenery and props for their future productions.

Whist it is acknowledged that the services provided by the Orange Theatre Company would be available “uniformly” to all persons, the shed will only be available to the members of the Theatre Company.

The amount sought as an interest free loan is $60,000. The Orange Theatre Company have identified that the total cost to construct the shed is approximately $100,000, and that the Theatre Company will be financing the difference between the loan and the construction cost.

4 Council will undertake a due diligence and probity check to establish the ability of the applicant to service the loan principal repayments.

In their application the Orange Theatre Company have submitted financial records for the last three years. In reviewing their accounts Council staff have expressed some concerns over the Theatre Company’s ability to service a loan of this size.

From their financial records it appears that the Theatre Company’s ability to generate a profit (or loss) is heavily influenced by the success of the shows that they perform. In reviewing each year’s financials, the net result for each of the first two years would not have been sufficient to service this loan, whereas the third would have been able to service the loan quite comfortably.

Council staff have met with representatives of the Theatre Company to discuss this concern. In response the Theatre Company have prepared a preliminary budget for 2016 which proposes a sufficient surplus to service the loan obligations for that year. A copy of this is included in the attached additional information. In the additional information submitted, the Theatre Company acknowledge the need to generate profits from shows to facilitate their ability to service the loan, accordingly the Theatre Company have provided the undertaking to focus on shows which provide a financial gain, rather than those based on artistic merit.

Council’s Policy also requires that all applications for an interest free loan are to be considered as part of the following year’s Draft Delivery/Operational Plan along with all other new expenditure items. The Orange Theatre Company is seeking to have the loan approved as soon as possible and hence to be considered during the current Delivery/Operational Plan.

While the request falls outside Council’s Policy, the cultural benefits provided to the community by the Orange Theatre Company are acknowledged. There is no doubt that the Company’s productions provide considerable community benefit.

Should Council resolve to support this application, the details of the application and the terms of the loan will need to be placed on a public exhibition for a period of 28 days. Following the closure of the exhibition period, a report will be presented to Council where Council will need to give consideration to any submissions received.

It is the recommendation of this report that Council decline the request from the Orange Theatre Company for an Interest Free Loan as:

1 Council’s upper limit of exposure to loan and loan guarantee commitments has already been exceeded;

2 The new shed is not available uniformly to all persons or to a significant number of persons within the Council’s area; and

3 There is a concern over whether the Theatre Company have the capacity to service the loan.

Attachments

1 Orange Theatre Company - Application for an Interest Free Loan, IC15/12552 ⇩

2 Additional Information - Orange Theatre Company - Application for Interest Free Loan, IC15/14389 ⇩

Finance Policy Committee 6 October 2015

3.5 Request for Interest Free Loan - Orange Theatre Company

Attachment 2 Additional Information - Orange Theatre Company - Application for Interest Free Loan

Orange Theatre Company

Celebrating 40 years in 2016

On June 13, 2013 a meeting was held between Orange Theatre Company (OTC) President at the time Trevor Carroll, and council staff Scott Maunder and Michelle Pearce regarding the premises at 146 March Street, which council has leased to OTC at a peppercorn rent for the purposes of running our costume hire.

At this meeting OTC was informed that Council was giving us advanced notice of their intention to resume this building as part of Council consolidation and future plans, and that we would need to find alternative premises for our Costume Hire in the near future.

As we believe that our service is a valuable community asset, a letter was sent to Mr Gary Styles requesting that council continue their support with an alternative location or options for the relocation of OTC rather than see the service close.

Unfortunately an alternative solution was not available from council for the OTC to continue this service. The committee at the time, with limited options, agreed that building a new storage shed would enable us to properly store our costumes for OTC use, as well as the ability to better support local schools and community groups with our Costume Hire, and that when the time came to vacate 146 March St the only loss would be the public hire.

We approached several local building companies to tender on building our new storage shed. Local building company, Banksia Building was awarded the contract and council passed the DA for the OTC to build on Council Land adjacent to our existing facility.

A new lease/agreement is currently being drafted by council to cover the existing shed and including the new shed. Terms are as follows:

- OTC pay an annual contribution fee of $650 towards the cost of rates, water and electricity charges.

- It will note that the sheds have been paid for by the OTC and constructed on Council-owned land.

- The term of the agreement will be based on an initial term of 5 years, with options to renew following regular reviews.

- In the event that OTC ceases to exist, the ownership of both sheds would revert to Orange City Council.

The MOU for 146 March St (Costume Hire) would also be renewed. Council could then give OTC three months’ notice in writing to vacate.

The OTC requests an Interest free loan of $60,000 over 4 years to help pay for the new storage shed. OTC has contributed $50,000 to this project so far.

The interest free loan would cover the remainder of the cost of the shed and would allow OTC to maintain a reasonable cash flow coming into our 2016 Season, which is also the year of our 40^th Birthday Celebrations.

Orange Theatre Company is well established, and is the only company in Orange that offers this artistic outlet and entertainment to the community each and every year. From our 5000 plus audience members per year, the amazing local talent that grace the stage up to 3 times a year, and the vast amount of volunteers that work behind the scenes, every corner of our community is involved in the success of the OTC and this contributes to making Orange such a great place to live, a culturally rich and diverse regional city that caters for all members of our community.

OTC Community Reach

The Orange Theatre Company member base represents a complete cross section of the Community.

Our members include and have included, children still not old enough to go to school, teachers, tradespeople, doctors, solicitors, politicians, local business owners, students at every level of their education, miners and musicians.

Current financial members: 123

Average Tickets sold per year: 5000

Orange Theatre Company’s scenery and costumes are utilised by every school production in Orange and throughout the Central West. Our costumes are hired out to other Amateur theatre companies throughout NSW and into Victoria.

Orange Theatre Company does not charge a hire fee to Orange Schools for costumes or sets. Annual Value to Community a minimum of $5000.

Orange Theatre Company supports charity organisations whenever possible, this includes supplying tickets to our shows for use in raffles and fundraising, and also supplying sets, scenery and costumes at no charge.

OTC is also successful in the National arena, regularly bringing home awards from the Canberra Area Theatre Awards, showing that Orange is committed to supporting the local arts and artists.

OTC Adding to the Orange Economy

Orange Theatre Company is self-funded; our income is almost entirely from ticket sales revenue. Orange Theatre Company strives to engage with local businesses where possible. The following are the average amounts spent annually by Orange Theatre Company with local businesses. (2013 and 2014 figures)

Orange Civic Theatre Theatre Hire, Technician Hire, Seat Levy $100,000

Local Musicians Orchestra for Musicals $30,000

Hardware and Steel Suppliers Sets and Props construction $10,000

Miscellaneous Mowing, Maintenance, Security, cleaning, etc. $6,000

Financial Book Keeping, Yearly Financial Audits $3,000

Advertising Poster Printing, TV Ads, Newspaper Ads $5,000

OTC Yearly Spending in Orange $154,000

Ability to Service the loan

OTC is a not-for-profit organisation. The majority of our income goes back into financing our next show and paying the everyday running costs of the Company.

In the past OTC has been fortunate enough to choose shows based on Artistic merit, rather than financial gain. This is reflected in the financials attached to this submission. This would obviously not be a luxury that OTC would have while servicing the loan.

The plan, if the loan application is successful, is that a proportion of the required loan repayment would be built into each show budget. This will ensure that the focus of the OTC committee will be on staging profitable shows and ensuring that the loan is repaid.

OTC Available Funds at 31^st August 2015

$102,666.04 Closing Balance
-$7,443.20 Remainder of OTC’s $50,000 shed contribution
$95,222.84 TOTAL FUNDS

2016 Preliminary Budget

May - Musical

Expenditure             $70,553.45
Income                                   $90,000
Profit/Loss                $19,446.55

July – Play

Expenditure             $20,600
Income                                   $27,300
Profit/Loss                $6,700

October - Musical

Expenditure             $117,265.22
Income                                   $132,302.57
Profit/Loss                $15,037.05

Other (Company Running Costs, Membership Income etc)

Expenditure             $20,000
Income                                   $4,000
Profit/Loss                -$16,000

TOTAL

Expenditure            $228,418.67
Income                                   $253,602.57
Profit/Loss               $25,183.90

The ability to maintain the highest quality shows and to continue to provide this service to the Orange community, will largely be dependent on the support of the council through the approval of this application.

Thank you for your time and consideration.

Yours Sincerely,

Scott Halls

President

Orange Theatre Company

Finance Policy Committee 6 October 2015

3.6 Sporting Grounds Operational Support

TRIM REFERENCE: 2015/2530

AUTHOR: Scott Maunder, Director Community, Recreation and Cultural Services

EXECUTIVE Summary

This report advises Council of the outcome of placing the proposed support sought by Orange Waratahs Sports Club Limited for the maintenance of sporting fields on exhibition.

Link To Delivery/OPerational Plan

The recommendation in this report relates to the Delivery/Operational Plan strategy “6.2 Our Community – Seek innovative and creative solutions in partnership with key stakeholders that convert the demonstrated community need for sporting and recreational services/facilities to infrastructure and activities”.

Financial Implications

The donation will be funded from the existing City Presentation budget.

Policy and Governance Implications

Nil

Recommendation

That Council provide a donation for the annual management and maintenance of Orange Waratahs Sporting Club sporting fields as follows:

1 In 2015/16 - $90,000 (ex GST) to be funded from the existing City Presentation budget.

2 For 2016/17 to 2020/21 financial years, the donation be indexed annually by CPI with the allocation coming from the existing City Presentation budget.

further considerations

SUPPORTING INFORMATION

At the Finance Policy Committee meeting of 7 July 2015, Council resolved:

RESOLVED - 15/278 Cr J Hamling/Cr S Munro

1 That Council place on exhibition a donation for the annual management and maintenance of Orange Waratahs Sporting Club sporting fields as follows:

a In 2015/16 - $90,000 (ex GST) to be funded from the existing City Presentation budget

b For 2016/17 to 2020/21 financial years, the donation be indexed annually by CPI with the allocation coming from the existing City Presentation budget.

2 That a report be brought back to Council outlining submissions received.

This proposed donation was placed on public exhibition for a period of 28 days, with no submissions being received.

Accordingly this donation is now resubmitted for Council’s consideration.

Finance Policy Committee 6 October 2015

3.7 Strategic Policy Review

TRIM REFERENCE: 2015/2355

AUTHOR: Michelle Catlin, Manager Administration and Governance

EXECUTIVE Summary

This report continues the review of Council’s Strategic Policy Register. Several Policies have been reviewed and are recommended for exhibition.

Link To Delivery/OPerational Plan

Financial Implications

Nil

Policy and Governance Implications

Council’s Strategic Policies are being reviewed and amended to ensure ongoing compliance with legislation and industry best practice. Policies of Council are of two types – Strategic Policies are determined by Council, and relate to Councillors and the broader community. These policies require public exhibition (if new or include significant changes) and adoption by Council. Operational Policies are determined and implemented by the General Manager, and relate to staff and the operations of the organisation.

In reviewing a number of the current Strategic Policies, it is clear that they should be Operational, or are incorporated in Council’s suite of Integrated Planning and Reporting documents. As the review of policies continues, it is expected that a number of former Strategic Policies will be recommended to Council for deletion.

Recommendation

1 That Council place on public exhibition the following policies:

§ Strategic Policy ST100 – Graffiti Reward Scheme

§ Strategic Policy ST062 – Record Management for Councillors

§ Strategic Policy ST092 – Privacy and Personal Information

§ Strategic Policy ST059 – Public Interest Disclosures and Internal Reporting

§ Strategic Policy ST056 – Enterprise Risk Management

§ Strategic Policy – ST125 – Working on Council’s Water and Sewer Infrastructure

2 That Council delete ST045 – Land Sales as the ability to negotiate land sales is identified in the Register of Delegations to the General Manager and land sale opportunities are reported to Council.

further considerations

SUPPORTING INFORMATION

Policies for exhibition

Policy	Comment
ST100 – Graffiti Reward Scheme	Formatting updates. Clarification that the reward only applies to graffiti on Council owned land (objectives).
ST062 – Record Management for Councillors	Formatting updates. 1.2.1 – Clarification that a Council record is any correspondence relating to Council business. 1.2.2 – Councillors providing personal character references must not provide these on Council letterhead. 2.4 – Where mail addressed to a Councillor relates to an operational issue, it will be referred to a staff member for response, and the Councillor notified.
ST092 – Privacy and Personal Information	Formatting updates. 3.2 – Reference to how Council will deal with petitions in the Code of Meeting Practice. 3.3 – Objectors will be advised by notification in an advertisement of a Development Application that their objection will be included in a public report. Part 4 – Inclusion of health information in relation to residential care clients.
ST059 – Public Interest Disclosures and Internal Reporting	Formatting updates. 1.1.6 – Include reference to Council’s Complaints Management Policy. Additions throughout to include reports made by Councillors and how they will be dealt with.
ST056 – Enterprise Risk Management	Inclusion of Pulse software solution to the toolkit.
ST125 – Working on Council’s Water and Sewer Infrastructure	Provision for contractors to become accredited to be able to undertake some work on Council’s Water and Sewer assets. Development of comprehensive procedure to manage the accreditation process and manage the risks associated with external contractors working on Council assets.

Policy for deletion

The following policy has been reviewed and is recommended for deletion. A comment is provided below:

Policy

Comment

ST045 – Land Sales

The ability to negotiate land sales is identified in the Register of Delegations to the General Manager. This delegation allows the General Manager to negotiate sales within 10% of the market value or the price resolved by Council.

All sales are also reported to Council, so this policy is no longer required and is therefore recommended for deletion.

Attachments

1 FOR EXHIBITION - Strategic Policy - ST100 - Graffiti Reward Scheme (2015), D15/34086 ⇩

2 FOR EXHIBITION - Strategic Policy - ST062 - Records Management for Councillors and Procedures (2015), D15/34133 ⇩

3 FOR EXHIBITION - Strategic Policy - ST092 - Privacy and Personal Information and Procedure (2015), D15/34148 ⇩

4 FOR EXHIBITION - Strategic Policy - ST059 - Public Interest Disclosures and Internal Reporting (2015), D15/34315 ⇩

5 FOR EXHIBITION - Strategic Policy - ST056 - Enterprise Risk Management and Toolkit - August 2015, D15/33999 ⇩

6 FOR EXHIBITION - Strategic Policy - ST125 - Working on Council's Water and Sewer Infrastructure, D15/36192 ⇩

7 FOR DELETION - Strategic Policy - ST045 - Land Sales (2014), D14/28301 ⇩