Supplementary Agenda of General Meeting

General Manager's Report No. GM14/23

Office of the General Manager

Date of Meeting: 10/05/2023

11 PROPERTY STRATEGY

EXECUTIVE SUMMARY

· A draft Property Strategy has been developed for Council’s property portfolio.

· The draft Property Strategy consists of a background to the existing property portfolio, the purposes and objectives of the Strategy, its alignment to existing Strategic plans and documents, core focus areas for operational management and will assist in identifying key recommendations for improved management of Councils property portfolio.

· It is proposed that the draft Property Strategy be publicly exhibited for a period of 28 days using Council’s adopted engagement platform, with any comments received during the exhibition to be reported back to Council prior to adoption of the Strategy and the development of recommended actions.

RECOMMENDATION

THAT Council resolve to:

1. Publicly exhibit the draft Property Strategy for a period of 28 days.

2. A further report to be presented to Council following the public exhibition considering any comments received.

PURPOSE

The purpose of this report is to provide Council with a draft Property Strategy seeking Council support and a resolution to publicly exhibit the document for a period of twenty eight (28) days using Council’s engagement platform. The draft strategy seeks to inform Council in its management of a valuable asset on behalf of the Community, identifying key principles and objectives and ultimately priorities for the efforts of Council in maximising value for the community through the delivery of strategic objectives and improved revenue returns.

Background

Hornsby Shire Council is the custodian, on behalf of the community of a considerable portfolio of property holdings that are owned and under its management. This includes property used for core activities of Council, for investment, community and recreational use and Crown land used for various purposes.

Through these assets, Council delivers a broad range of services to its community, many being provided directly or indirectly from properties within Council’s portfolio. To date, Council has not prepared or managed its property assets via an integrated Property Strategy. An endorsed Property Strategy will help provide overall direction for Council’s property portfolio in achieving the organisations objectives and key community outcomes.

The benefits to Council and its community of preparing and implementing a Property Strategy are that it will allow Council’s property assets to achieve their full potential and ultimately mean they make a beneficial contribution toward the long term financial sustainability of the organisation.

The aim of preparing and implementing the strategy is to improve and increase the value of the portfolio to the community. Some feedback from the community during the recent engagement on the proposed Special rate Variation highlighted that Council should seek to do more with the assets it currently holds rather than seeking to simply increase rates and other fees and charges.

By reviewing the property portfolio as part of the preparation of the Property Strategy and continuing to do so regularly, Council can work toward best practice by ensuring use of the portfolio is optimised and it is well managed. Initial review of Councils portfolio suggests there has been substantial underinvestment in these assets over an extended period which has lead to decreasing and poor returns and less ability to deliver on the strategic priorities of Council.

Thus, a draft Property Strategy has been prepared to support Council’s organisational strategic directions. References to the Property Strategy and its aims and objectives can be found in Council’s Community Strategic Plan, Your Vision, Your Future 2032:

G8.1 “Ensure the financial sustainability of Council through strategic management of assets and short, medium and long term financial planning”

And within the current Delivery Plan:

(8A.K12) “Evaluate strategic property holdings for highest and best use”, and

(8A.K37) “Progress priority actions of the Property Strategy”

DISCUSSION

The purpose of preparing the Property Strategy is to provide strategic focus mainly for Council’s operational land holdings within the property portfolio, along with providing framework to guide future decision making for development and acquisition, management and where, in the best interests of community need, change in the make-up of Councils portfolio of property.

The objectives of the Property Strategy are as follows:

· To align the Property Portfolio with the long-term vision of Council and the community within Your Vision, Your Future 2032, and other relevant adopted strategic documents.

· To assist with achieving Councils Long Term Financial Plan goals and objectives by creating new opportunities for additional recurring income streams and reinvesting any proceeds from property divestment.

· To achieve highest and best use from the existing Property Portfolio to maximise return and minimise related costs to Council.

· To optimize the value of the Property Portfolio for the benefit of the community and Council.

· To identify key operational properties within the Property Portfolio and set short and long-term recommendations for future use.

· To identify underutilized/underperforming property assets within the existing Property Portfolio and consider them for further investment, divestment or redevelopment opportunities.

· To consider acquisition of other strategically located property for future development and investment purposes.

Property Strategy - Part A

The Strategy will ultimately be developed into two parts. Part A of the Property Strategy provides background to the existing property portfolio, the purpose and objectives of the Property Strategy and how the document aligns with Council’s existing strategic plans and documents.

Further it provides a current status of the portfolio (operational, community and Crown land) and areas of core focus for operational management with frequencies for undertaking each of the operational activities included under the focus areas of Manage, Transact and Invest.

Aside from the above, the later sections of the document refer to how properties were selected from Council’s portfolio for further review and focus and describes the process for determining the order for investigating the properties that have been selected.

The document outlines the approval process to be followed for considering divestment or development projects of Council property and strategic acquisition of property. For development projects it lists the available methods of delivery and discusses options for funding those projects.

At the end there is a section that refers to periodic review of Part A of the Property Strategy and the regularity for its future review.

A draft of Part A of the Property Strategy is attached to this report as Attachment A.

Following adoption of Part, A of the Strategy staff will, amongst a range of identified priority actions, develop a draft part B of the Strategy.

Property Strategy - Part B

Part B of the Property Strategy will contain site specific information sheets for each property with details for each of the items listed below (note: this section may ultimately contain commercially sensitive information concerning Council properties, including values and strategies for developing, divesting or holding each property and potential strategic acquisitions).

Within the site specific information sheets to be prepared for each property selected for inclusion the following information will be provided:

· Address, Lot & DP, property name.

· Current planning controls (HELP 2013).

· Current Use & Occupation.

· Valuations (Fair Value, Market Value).

· Aerial View of the site.

· Condition of any Buildings.

· Site constraints – Heritage, Easements, known Contamination, Overland Flooding, Fire.

· Highest & Best Use.

· Recommendations for Short & Long Term.

· Actions.

· List of Associated Reports & Studies.

It is proposed that this section of the strategy will be undertaken following the adoption of Part A as outlined above in the report and will be included in ongoing reporting to Council on the ongoing development of the strategy.

Prioritisation of actions identified within the strategy

With a significant portfolio of properties and what will likely be an extensive list of recommended actions to be undertaken the prioritisation of actions will need to be critically addressed having regards to available resources including capital, recurrent funding, staff capacity, organisational capability and risk. The risk framework will need to consider both the risks of action as well as inaction.

Actions within the strategy fall within the key focus areas of Transact, Manage and Invest. Having regard to the above matters which constrain Councils ability to deliver all the likely actions in a short period of time the following framework has been identified within the draft strategy as a means by which properties can be prioritised for review and management action to ensure they perform to community expectations and contribute to achievement of the objectives set out in the strategy.

· Considered to be an underperforming or underutilised asset.

· Has development potential and/or is yet to achieve its Highest & Best Use.

· Has an existing high value.

· Identified within an existing Strategic plan or document.

· Following a resolution of Council.

Consultation

A considerable amount of consultation has been undertaken internally in preparing the draft Property Strategy, including with the Council’s Executive Group, Land & Property Services, Strategic Landuse Planning, Parks, Trees and Recreation, Library and Community Services and Building Services teams.

Public Exhibition

To further consult the Property Strategy, it is proposed that the draft strategy be publicly exhibited to seek feedback from the community for a period of twenty eight (28) days and that any comments be reported back to Council at the next available meeting.

BUDGET

There are no direct budgetary implications associated with this Report. Council manages a overall property portfolio of some $750 million dollars noting that this figure includes land values, and improvements to land including community use, operational and more commercially focused buildings.

POLICY

There are no direct policy implications associated with this Report. The Strategy if adopted will assist in providing policy guidance for Council and staff in the effective management of Councils property portfolio.

CONCLUSION

A draft Property Strategy has been prepared and is ready for Council’s consideration. Prior to considering Part A for adoption the document is proposed to be exhibited for public review and comment. A further report will be provided to Council following the exhibition period outlining any comments received.

RESPONSIBLE OFFICER

The officer responsible for the preparation of this Report is the Property Asset Manager (Strategy) – Kent Walton - who can be contacted on 9847-6234.

Steven Head

General Manager

Office of the General Manager

Attachments:

1.⇩

Attachment A - draft Property Strategy

File Reference: F2022/00307

Document Number: D08616165