Agenda of Ordinary Meeting of Council

Report submitted to the Ordinary Meeting of Council on Monday 13 May 2024

RP-1

Reports from Staff

RP-1 INTEGRATED PLANNING AND REPORTING (IP&R) - DRAFT DOCUMENTS FOR EXHIBITION

Author: Scott Gray

Summary:

Attached for public exhibition are the draft Operational Plan 2024/25, draft Fees and Charges 2024/25 and draft Long Term Financial Plan 2024/25.

Recommendation

That Council:

a place the following documents on public exhibition for 28 days commencing 14 May 2024 and concluding on 10 June 2024:

i draft Operational Plan 2024/25

ii draft Fees and Charges for the financial year 2024/25

iii draft Long Term Financial Plan 2024/25

b receive a further report after the public exhibition period:

i addressing any submissions made in respect of the draft documents

ii proposing adoption of the draft documents

Report

Integrated Planning and Reporting Framework

The Integrated Planning and Reporting (IP&R) framework helps Council discuss funding priorities and service levels with our community, including how these shape our local identity and how we can work together to create a more sustainable future.

Under NSW Government legislation, councils must prepare a number of plans detailing how they intend to deliver works and services in the short and long term. These plans are based on the community’s priorities and present a balanced approach to planning that considers how our resources can be used to deliver community outcomes.

The 2024/25 Integrated Planning and Reporting Resourcing Strategies and Plans have been formulated together with consideration of the revised Wagga View Community Strategic Plan 2040 (CSP) previously adopted by Council.

A key focus of the attached draft documents is for Council to deliver on the Community Strategic Plan 2040 vision; “In 2040 Wagga will be a thriving, innovative, connected and inclusive community on the Murrumbidgee. Rich in opportunity, choice, learning and environment. Wagga is a place where paths cross and people meet”, which is underpinned by the following strategic directions (themes):

· Community leadership and collaboration;

· Safe and healthy community;

· Growing economy;

· Community place and identity; and

· The environment.

The CSP identifies the objectives that the community wants to head towards over the next ten+ years and also sets out the strategies on how to get there. The CSP sits at the highest level of Council’s planning hierarchy and guides all other Council strategies and plans.

Image 1 – Integrated Planning & Reporting (IP&R) Framework

Diagram

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1. Operational Plan 2024/25

The Operational Plan (Attachment 1) outlines the actions (services, programs and projects) that Council will undertake each financial year that contribute to achieving the commitments of the Delivery Program and CSP. It identifies the annual budget required to deliver the actions and the responsible service area within Council who will oversee and report on the actions.

2. Long Term Financial Plan

The Long Term Financial Plan (LTFP) (Attachment 2) is an essential element of the resourcing strategy which details how the strategic aspirations of Council outlined in the CSP can be achieved in terms of time, money, assets and people.

Council’s LTFP is a ten-year financial planning document with an emphasis on long-term financial sustainability. Financial sustainability is one of the key issues facing local government due to several contributing factors including growing demands for community services and facilities and their ongoing operational costs, constrained revenue growth and ageing infrastructure.

The LTFP is formulated using a number of estimates and assumptions, to project the future revenue and expenditure required of Council to deliver those services, projects and programs expected by the community for the next ten years. In doing so, it addresses the issues that impact on Council’s ability to fund its services and capital works whilst remaining financially sustainable.

As part of the LTFP review process, a financial scenario has been included to address the ongoing infrastructure maintenance and renewal shortfall as identified in Council’s Asset Management Systems across all asset categories, with part-funding to be investigated from a proposed future Special Rate Variation.

Capital Projects

Capital works projects and programs account for over $81 million of the planned activities for the 2024/25 financial year. There are three different categories of capital works; Confirmed ($21.4M), Recurrent ($23.7M) and Pending ($35.9M).

Confirmed Capital projects refer to the new one-off projects Council will undertake during the year. Recurrent capital projects refer to the expenditure allocated on an annual basis for capital works programs. The Pending capital projects are those that are not delivery ready and so require a resolution of Council to proceed.

Below is just a sample of some of the more significant capital works projects over $1M (excluding roads) identified as “Confirmed” for the 2024/25 financial year:

One-Off Capital Projects	2024/25 Budget
GWMC – Construction of new Waste Cell	$2,119,281
GWMC – Cell Extension	$1,800,000
GWMC – Gas Capture Network Expansion & Gas Powered Evaporator	$1,769,728
GWMC – Construction of a new Monocell	$1,829,186
Jim Elphick Tennis Centre Upgrade	$4,052,946
Sewer – Telemetry Hardware Upgrades	$1,000,000

Roads Funding

The Capital Works Program within the LTFP includes budget amounts for one-off and recurrent Roads funding across the 10 years. For the 2024/25 financial year, there is a total allocation of $16.7M for roads, which includes one-off projects of ($5.4M) and recurrent programs of ($11.3M). The one-off roads projects and recurrent roads program budgets allocated for 2024/25 are shown below:

One-Off Roads Projects	2024/25 Budget
Glenfield Road Corridor Works	$71,950
Local Road Repair Program	$2,804,143
Pine Gully Road Corridor Works	$2,034,453
Red Hill Road Upgrade	$78,217
Regional Roads Repair Program	$350,000

Recurrent Roads Programs	2024/25 Budget
Gravel Resheets	$1,984,797
Heavy Patching Program	$1,085,858
Pavement Rehabilitation Program	$3,798,831
Regional Roads Supplementary Block Grant	$199,000
Reseal Program (Renewal)	$3,215,989
Urban Asphalt Program	$999,406

3. Fees and Charges

In accordance with Section 608 of the Local Government Act 1993, a council may charge and recover an approved fee for any service it provides.

The services for which an approved fee may be charged include the following provided under the Local Government Act or any other Act or the regulations, by the council:

· supplying a service, product or commodity

· giving information

· providing a service in connection with the exercise of the council’s regulatory functions-including receiving an application for approval, granting an approval, making an inspection and issuing a certificate

· allowing admission to any building or enclosure.

Financial Implications

The proposed adoption of the suite of Integrated Planning and reporting documents will be reported to Council 24 June 2024 after all submissions have been reviewed and Council officer responses are provided to Council for overall adoption.

Policy and Legislation

The documents have been created to meet Council’s Integrated Planning and Reporting requirements under the Local Government Act 1993 and Local Government Regulations 2021.

Link to Strategic Plan

Community Leadership and Collaboration

Objective: We have strong leadership

Outcome: We plan long term

Risk Management Issues for Council

A number of risk management issues were identified and have been actively managed.

A summary of these risks are as follows:

- Lack of engagement from the community

- Inability to meet everyone’s expectations

- Inability to resource and deliver on plans

Internal / External Consultation

Internal consultation was undertaken with relevant departments to prepare the draft documents for exhibition. Councillor workshops/discussions were also held with the following in attendance:

30 October 2023 – Oasis Zero Base Budget Workshop

Present: Mayor Councillor D Tout, Councillor G Davies, Councillor R Foley, Councillor M Henderson, Councillor R Kendall, Councillor T Koschel, Councillor J McKinnon, Councillor A Parkins

28 November 2023 – LTFP Capital One-off Projects and consideration of new Operational Project Requests Budget Workshop

Present: Mayor Councillor D Tout, Councillor J McKinnon, Councillor G Davies, Councillor R Foley, Councillor M Henderson, Councillor T Koschel.

4 March 2024 – Councillor Budget Workshop

Present: Mayor Councillor D Tout, Councillor R Foley, Councillor M Henderson, Councillor R Kendall, Councillor T Koschel, Councillor J McKinnon, Councillor A Parkins

18 March 2024 – Councillor Budget Workshop

Present: Mayor Councillor D Tout, Councillor G Davies, Councillor R Foley, Councillor M Henderson, Councillor T Koschel, Councillor J McKinnon, Councillor A Parkins

The documents will be placed on public exhibition for a 28-day period commencing from 14 May 2024 and concluding on 10 June 2024. As part of the exhibition period a variety of communication methods will be used, to not only promote the public exhibition period but also promote the purpose of the documents.

Mail

Traditional Media

Community Engagement

Digital

Rates notices insert

Direct mail

Letterbox drop

Council news

Media release

Media opportunity

TV/radio advertising

One-on-one meeting(s)

Community meeting(s)

Stakeholder workshop(s)

Drop-in session(s)

Survey/feedback form(s)

Connect.Wagga

Email newsletter

Social media

Website

Inform

Consult

Involve

Collaborate

Attachments

1.	Draft Operational Plan 2024/25 - Provided under separate cover
2 .	Draft Long Term Financial Plan 2024/25 - Provided under separate cover
3 .	Draft Fees and Charges 2024/25 - Provided under separate cover

Report submitted to the Ordinary Meeting of Council on Monday 13 May 2024

RP-2

RP-2 SOUTHERN GROWTH AREA CONTEXT PAPER

Author: Lou Hawkins

Executive: John Sidgwick

Summary:

The purpose of this paper is to provide a Strategic Context Paper for the Southern Growth Area.

It responds to a request of the Department of Planning, Housing and Infrastructure (the Department), formerly the Department of Planning and Environment, and is in response to the Council resolution at the Ordinary Meeting of Council on 22 August 2022.

Council staff have undertaken high-level precinct planning and mapped the strategic support and pathways for consideration of planning proposals in the Southern Growth Area (SGA) called “The Southern Growth Area Strategic Context Paper”. This work seeks to build on the analysis outlined in the Council report on 456 and 474 Plumpton Road, Rowan provided at the Ordinary Council Meeting of 7 November 2022.

The paper specifically:

· responds to recommendations g). and h). of the Council resolution of 22 August 2022, providing high level structure planning for the Southern Growth Area.

· responds to the Department’s request that further strategic justification be undertaken, and additional analysis of factors of change be provided before consideration of any further planning proposals at Gateway.

Recommendation

That Council:

a receive and note the Southern Growth Area Strategic Context Paper attached to this report

b note that the Southern Growth Area Strategic Context Paper has been prepared to respond to part (g) of Council resolution 22/264 from the 22 August 2022 Ordinary Council Meeting

c note that high-level structure planning for the remaining growth area (SGA) and infill corridors has been undertaken to coordinate development outcomes across both urban releases in Zone 1 of the SGA.

d resolve to consider and assess planning proposals within Zone 1 of the SGA, where they meet the existing strategic merit identified in the Southern Growth Area Strategic Context Paper

Report

Previously, Council received and considered two planning proposal applications in the SGA. These were LEP21/0001 (Sunnyside) and LEP21/0006 (Rowan). Throughout 2021-2023 both applications were assessed by Council staff. At the Ordinary Council Meeting held on 22 August 2022, Council considered the Rowan proposal and made the following resolution:

That Council:

a) provide in principle support for planning proposal LEP21/0006 to amend the Wagga Wagga Local Environmental Plan 2010 land zoning, minimum lot size and urban release area provisions

b) prepare an addendum to the application to address statutory requirements and site-specific matters

c) request the proponent prepare and submit a biodiversity development assessment report, which includes offsets and impacts on future public land

d) prepare an amendment to the Wagga Wagga Development Control Plan that covers LEP21/0001 and LEP21/0006 to demonstrate high-level structure planning and incorporate site-specific controls

e) continue preparations of a contribution framework to fund identified infrastructure upgrades for the Southern Growth Area

f) require a further report to be prepared seeking endorsement to submit the planning proposal for Gateway Determination once the information identified in (b) above is received and items (c) and (d) are completed

g) prepare a high-level structure plan for the remaining growth area and infill corridor to coordinate development outcomes across both urban releases

h) not consider any planning proposals within this area until this structure planning is complete (emphasis added)

Council staff have undertaken significant analysis and strategic work to prepare high-level structure planning for the Southern Growth Area (SGA). The Indicative Southern Growth Area Zone Map (Figure 1) provides the overarching framework, consistent with existing strategic policy, for consideration of proponent led planning proposals that respond to the precinct scale needs of the SGA.

Figure 1 – Indicative Southern Growth Area Zone Map

The Sunnyside proposal was considered by Council at the ordinary meeting of Council on 7 November 2022 and lodged in the portal later the same month. The Sunnyside planning proposal was unsuccessful, and as a result of this, the Rowan proposal was put on hold.

Following the refusal of the Sunnyside proposal, Council met with senior members of the Department to identify a pathway to approval. Building on the reasons for refusal provided as part of the Gateway Determination, Council and the Department developed a four-step process to facilitate success of a subsequent planning proposal. This was:

1. Establish a stronger planning rationale in the form of a strategic context paper to be considered and adopted by Council.

2. Determine the infrastructure requirements for the broader precinct and understand the required sequencing and funding arrangements.

3. Ensure that any subsequent planning proposal took a consolidated and combined approach between the two existing sites.

4. Lodge a fresh planning proposal.

This work has been undertaken and is presented in the Southern Growth Area Policy Context Paper.

Financial Implications

There are no financial implications in adopting this Council report and proposed resolutions. As noted earlier in this report, Council staff have undertaken the high-level precinct planning and mapped the strategic support and pathways for consideration of proponent led planning proposals in the Southern Growth Area (SGA) Zone 1 called “The Southern Growth Area Strategic Context Paper.”

If Council would prefer that all future planning proposals in the SGA be Council led amendments, then this will require a full project plan and appropriate funding and staff resourcing to realise, like the approach being undertaken in the Northern Growth Area. While this is not the recommended approach, if this is the preferred approach, a high-level project plan and estimated costings can be brought to Council at a subsequent time.

A subsequent assessment report considering the site specific and strategic merit of the actual combined planning proposal will be brought to Council at a later date (anticipated in June). This report will detail financial implications relating to infrastructure contributions; however, the Southern Growth Area Context Paper does not create any financial implications.

Policy and Legislation

Wagga Wagga Local Environmental Plan 2010

State Environmental Planning Policy

Environmental Planning and assessment Regulation

Local Government Act

Development Control Plan 2010

Link to Strategic Plan

The Environment

Objective: Future growth and development of Wagga Wagga is planned for in a sustainable manner

Provide for a diversity of housing that meets our needs

Risk Management Issues for Council

In making this resolution, Council will open the door for proponent led applications in the Southern Growth Area in Zone 1. Council staff are confident that the existing policy analysis and evidence base articulated in the Southern Growth Area Strategic Context Paper ensure that only strategic planning proposals that respond to the precinct scale, and appropriately provide for infrastructure development and sequencing can be supported by Council. As Zones 2-4 are not greenfield areas, but rather urban renewal/infill sites, precinct scale planning for these areas will need to consider a broader range of interests, including appropriate public consultation with existing landowners, before any planning proposals should be considered. This strategic work will need to be undertaken separately; however, high-level strategic identification and feasibility has been undertaken for these areas to ensure that planning proposals in Zone 1 do not prejudice subsequent infill development of Zones 2-4, with a preference for enabling infrastructure that may assist in unlocking Zones 2-4.

Council staff will undertake further project planning and scoping work to determine the cost and resourcing required to undertake more complete precinct structure planning for Zones 2-4 of the SGA. As zones 2-4 will impact existing dwellings on Wagga Wagga’s urban fringe it will involve a full community engagement process. A strategic paper outlining this approach and project framework will be brought forward to council at the appropriate time. Until this work has been completed, and the strategic justification to support a rezoning has been developed, Council will not support the intensification of residential uses in zones 2-4.

Internal / External Consultation

The Southern Growth Area Strategic Context Paper analyses the existing planning policy, strategy, and statute, and does not propose new policy. It interpolates drivers of change (population and economics) within the existing policy framework. For this reason, the Southern Growth Area Strategic Context Paper has not been publicly exhibited. Any subsequent Planning Proposals considered will undergo the required public exhibition periods in accordance with the Local Environmental Plan Making Guideline.

Attachments

Attachment 1 - Southern Growth Area Strategic Context Paper - Provided under separate cover

Report submitted to the Ordinary Meeting of Council on Monday 13 May 2024

RP-3

RP-3 RIVERSIDE STAGE 3 BUSINESS CASE

Author: Fiona Hamilton

General Manager: Peter Thompson

Summary:

This report has been prepared for Council to consider the final copy of the business case prepared for Riverside Stage 3 which was funded as part of the Regional NSW – Business Case and Strategy Development fund.

Recommendation

That Council:

a note and accept the outcomes of the stakeholder and community engagement program and the Riverside Stage 3 Business Case and supporting documentation

b pursue future funding opportunities, for the continued planning of the project, as they arise

Report

In July 2023, the AEC Group Pty Ltd was engaged to develop a detailed business case for a major entertainment and conferencing centre incorporating a First Nation’s cultural centre. The business case was funded through the NSW Government’s Regional NSW – Business Case and Strategy Development Grant Fund.

The development of the business case has been informed through extensive stakeholder and community engagement. Key industry sectors were consulted as well as community groups, local governments, arts and cultural groups and First Nations organisations. The business case focuses on infrastructure justification, service needs, stakeholder engagement, facility specifics, and the financial and economic viability.

Three development scenarios are outlined in the business case, including the concurrent development of both facilities and the development of each as standalone projects. In line with this a separate business case, business plan and prospectus has been developed to support the Cultural Centre as a standalone project.

In addition to the community and stakeholder findings, the business case incorporates detailed concept designs, the site assessment, traffic, parking and pedestrian impacts, a review of environmental factors, the financial analysis and cost benefit modelling.

Community and Stakeholder Engagement

The development of the Business Case has been significantly enriched by extensive stakeholder and community engagement, across 92 industry and cultural stakeholders and 3292 community members.

The stakeholder engagement covered key industry sectors aligning with the Regional NSW 20 Year vision for regional NSW and also included:

· Entertainment industry (including touring groups, agents and promoters)

· Event management

· Government organisations (e.g. economic development)

· Community groups and Not for Profits (NFP)

· Surrounding local governments (Councils)

· Local arts and cultural groups (including First Nations groups)

· Regional economic development representatives

· First Nations organisations and representatives

· Mawang Gaway Consultative Group - a Wagga Wagga based Aboriginal consultative group run by local Elders and community members provided Council with essential cultural advice and valuable community direction.

The stakeholder engagement informed both the need for, location and the design of the concepts presented in the business case.

Strong stakeholder support for the Entertainment/Convention and Cultural Centre is evidenced by the numerous letters of support received by notable representatives from the following organisations:

· Business NSW – Riverina Murray

· AgriFutures Australia

· Catholic Education – Diocese of Wagga Wagga

· TEG Pty Limited

· Committee for Wagga

· Wagga Wagga Business Chamber

· Lockhart Shire Council

· Australian Museum

· Australian National University

In addition, community engagement was undertaken between 22 November and 22 December 2023 and open to residents and the general public. The purpose of the engagement was to gather input and feedback for the following:

· The community’s level of support for a new regional scale entertainment, conference and convention centre partnered with a Wiradjuri Keeping Place and cultural education centre, as initially voiced through the Riverside Strategic Masterplan 2010

· The community’s level of support for an expansion of the Civic Theatre that adds two new venue spaces to support more performances, theatre, live music concerts and workshops as initially voiced through the Wagga Wagga City Council Cultural Plan 2020-30

· Community sentiment towards each project and general feedback

Engagement Outcomes

There was much interest in the concepts presented and community participation in the survey and visitors to pop-up locations was strong.

A total of 3292 participants were engaged through the consultation activities:

· 2892 visitors to the Have Your Say Wagga Wagga page.

· 400 visitors at 18 pop-up locations and 2 semi-permanent locations (Civic Theatre and Civic Centre Arcade).

· Articles in Council News distributed to subscribers.

· Over 340 students.

In total there were 1089 surveys and responses submitted during the engagement period:

· 994 online through Council’s Have Your Say survey.

· 91 survey contributions from a hard copy survey format.

· 5 written submissions – Catholic Education – Diocese of Wagga Wagga, Committee4Wagga, Coolamon Shire Council, Eastern Riverina Arts and Lockhart Shire Council.

Participants were asked to rank the two projects – Project A: Riverside and Project B: Civic Theatre. The level of support for both options was strong with 52% or 567 participants indicating support for Project B: Civic Theatre, 45% or 481 in support of Project A: Riverside and 3% or 36 participants not supporting either project.

Survey sentiment relating to project support reveals a strong desire among respondents for Wagga Wagga to evolve into a vibrant and diverse city, citing the lack of a suitable venue for conferences, exhibitions, and major events as a gap in current infrastructure. Many respondents believe the region is missing out on opportunities and events. They view proposed infrastructure investment as crucial for city growth, catering to diverse population needs, enhancing event access, and attracting and retaining residents.

Reasons for voting for Project A include:

· community quality of life and growth through infrastructure investment,

· economic growth by way of conferencing and flow on impacts,

· improved access to and attraction of entertainment and live performance,

· activation of business events and the tourism sector creating jobs and business development opportunities,

· cultural awareness and First Nations recognition.

Reasons for voting for Project B (Civic Theatre augmentation) include:

· greater community access to and attraction of cultural performance and live music – Wagga is missing out,

· economic focus/opportunities particularly through support for local business,

· upgrade of Civic Theatre – a larger theatre and enhanced facility is needed,

· support for performance spaces for local artists,

· support for the First Nations centre,

· concern over cost/risk of Project A, direct opposition to Project A.

Carparking and traffic movement, the scale of the building and cost/viability were raised as concerns by those who did not support the Riverside concept. Given the preliminary nature of the design feasibility exercise, there is more work that would need to be done in subsequent stages to resolve particular issues and address community questions and concerns raised during the consultation process.

Further detail is provided in the attached RS3 Community Engagement Report.

Business Case Findings

Supply

The examination of local facilities and services revealed insights into consumer preferences, while also highlighting capacity limitations of existing facilities. It identified a gap in indoor venues with capacity that can accommodate over 1,000 and up to 5,000 standing attendees, not only locally but also across Southern New South Wales, where such large-capacity facilities are lacking.

There is also a large gap in the provision of First Nations cultural facilities to service the region’s growing community and visitor opportunities. In addition to this, Wagga Wagga does not have an official Keeping Place, and the historical tradition of preserving artefacts is upheld through the dedicated efforts of knowledgeable Elders and community members on a voluntary basis, which is not sustainable for the long term.

Demand

Benchmarking of facilities nationwide offered valuable insights, design aspects and offerings of these centres informed the development and assessment of options.

The demand benchmarking considered the following demand across four core drivers:

1. The Meetings, Incentives, Conventions/ Conferences and Exhibitions (MICE) sector.

2. The live performance industry (with a focus on large live performances including concerts).

3. Cultural (First Nations) demand for facility uses.

4. Community functions.

Based on the benchmarking analysis, three demand models were developed - including low, medium and high demand. The projections below highlight the medium demand scenario which was used for the financial and economic modelling.

Table 1: Summary of event demand by category

MICE Events	There is potential demand to host up to 60 event days per annum with 80% of these being meetings and conventions and the remaining 20% being exhibitions.
Live Performance	There is potential demand to host 5 events annually with 1,500 attendees for popular music concerts. Based on benchmark facilities, it could be reasonable to expect under the medium scenario two live performances every five years that attract 5,000 attendees.
Community Functions	Based on information obtained from other similar facilities, under the medium scenario it has been assumed that the Convention/Entertainment Centre can host 75 event days across different event sizes.
Cultural Centre	The Cultural Centre demand was determined through benchmarking with other comparable cultural centres in other. regions. It was noted that the current Visitor Information Centre (VIC) is situated on the proposed site and attracted 27,612 visitors in 2023. With co-location with the Entertainment/ Convention Centre likely boosting visitation to the Cultural Centre, the medium scenario is assumed to attract 11,000 visitors annually (10,000 and an additional 10% resulting from colocation of the facilities), or approximately 220 attendees per week.

Event demand forms the basis of the revenue projections for the centres. An indicative calendar of 140 event days was developed as having the potential to be hosted at the proposed Entertainment/Convention Centre, with the assumption that events are spread evenly throughout the year. This projection anticipates a total of 72,715 annual attendees, encompassing 10,000 attendees at the Cultural Centre.

Table 2: Event Categories and Event Days with Estimated Annual Attendees – Medium Demand

Business Case Options and Concepts

Identifying the preferred option for the project included the development of a long list of site options (including site concept designs), which were assessed against the project objectives to produce a short list of options. A more rigorous multi-criteria assessment (MCA) was applied to the short list of options to identify a preferred option.

The four shortlisted options assessed in the MCA were:

1. Option One – Entertainment/Convention Centre and Cultural Centre combined under one roof (single building).

2. Option Two – Two new separate buildings: Entertainment/Convention Centre and Cultural Centre (Staged approach to be considered).

3. Option Three – Single new building for Entertainment/Convention Centre and the existing Playhouse building in the precinct to be redeveloped as the Cultural Centre. (Staged approach to be considered).

4. Option Four - Development of Entertainment/Convention Centre and Cultural Centre constrained on the lots owned by Council, with other site improvements (such as roads etc.) able to be constructed only on the Crown land.

The preferred option was ‘Option Three – Single new building for Entertainment/Convention Centre and the existing Playhouse building’ proceeded to detailed concept design stage.

It may be that the Entertainment/Convention Centre and the Culture Centre are developed at different stages in the completion of the precinct. Therefore, in the assessment of the project, in particular the financial assessment, the following three development scenarios are presented:

· Scenario One - Concurrent development of the Entertainment/Convention Centre and Cultural Centre

· Scenario Two – Development of the Entertainment/Convention Centre only

· Scenario Three – Development of the Cultural Centre only.

In addition to the development scenarios a sensitivity analysis was applied with different demand models (low, medium and high demand).

Business Case Financial Analysis

Financial Summary

The approach used in the financial analysis and the detailed results are outlined on pages 70-82 of the Business Case with a summary provided below.

Excluding broader external economic benefits realised through the project, the project is expected to result in annual operating deficits and negative cashflows, which is consistent with expectation from benchmarking with other convention/entertainment centres owned by local and state governments.

Both proposed facilities – the Entertainment/Convention Centre and the Cultural Centre - will require annual cash injections to sustain operations and to fund asset renewals as components of the facility reach the end of their useful life.

Project Profitability

The profitability of the project has been evaluated using Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) as well as the Operating Surplus/Deficit or Net Profit Before Tax (NPBT).

The full development, being the Entertainment/Convention Centre and Cultural Centre, is expected to produce a negative EBITDA result throughout the assessment period. EBITDA, after excluding non-cash depreciation, amortization, taxes and borrowing costs, assesses the cash profit generated solely from the project’s operational activities, without factoring in financing and assets. Over the first 10 years, the average annual EBITDA is -$0.2 million, which subsequently increases to an average of -$0.6 million from the eleventh to the twentieth years of operations due to increased maintenance expected. Over 40 years of operations, the project maintains an average annual EBITDA of -$0.89 million, as demonstrated in the following table.

Table 3: Average project EBITDA in 10 year increments over 40 years of operations

It is important to note that the Entertainment/Convention Centre is expected to generate a modest EBITDA profit in Year 5. This projection is based on the demand, with two extra live performance events, each expected to attract 5,000 attendees. The significance of this is that if the centre can consistently secure such events on an annual basis, the need for an annual subsidy will reduce. This subsidy would primarily be required in the later years of the assessment period to cover the increasing maintenance costs associated with aging assets.

Figure 1: Project Profitability over 10 years – Scenario One

Similar to other community facilities provided by Council, the cost of providing an Entertainment/Convention Centre and Cultural Centre is considered a community service obligation to the broader economic and community benefits delivered through the project. The projects could also be expected to drive both population and economic growth, leading to an increase in the rate revenue, developer contributions and fees and charges received by the Council that have not been included in the financial assessment.

Cultural Centre Notes

The Cultural Centre is intended to be managed by a distinct entity, consequently the only source of revenue to be derived for Council is from a peppercorn lease arrangement.

The entity responsible for providing the annual subsidy necessary to sustain the Cultural Centre remains undecided, given the array of options available that would alleviate the burden from falling on Council. Consequently, this aspect has been omitted from the analysis. The Business Plan developed for the Cultural Centre delineates the operations to be managed under a distinct entity - outlined in detail in Appendix I: Financial Analysis - and projects an annual subsidy requirement of $245,000.

Capital Cost Summary

The development of both facilities is estimated to cost $98 million, including equipment purchases, construction costs and contingency. Asset renewals have been considered and are estimated at $29 million, replacing assets as they reach end of life, over the 40-year assessment period.

Construction costs will increase for each of the centres if they are constructed separately and a 20% uplift has been applied, taking the total cost across both projects to $115.8 million.

Indicative Revenue

The Entertainment/Convention Centre is projected to earn revenue in the categories of venue hire, labour charges, other charges, and through the peppercorn lease for the cultural centre, totaling $1.9 million, applying a medium demand model.

The annual revenue will increase every fifth year due to hosting two additional live performance events, each with approximately 5,000 attendees, totaling $2.3 million.

Table 5: Revenue Summary – medium demand

The financial outcomes of the project will depend heavily upon the successfulness of event promotion and management. It is possible that through successful event promotion the facilities will exceed the demand, and therefore the revenue projections, especially if able to secure more frequent large live performances (5,000 person events) and large business conventions (800+ persons events).

Ongoing Project and Maintenance Costs

The Entertainment/Convention Centre is projected to incur costs relating to labour, materials and services and maintenance costs.

The annual variable costs will increase every fifth year, in line with the revenue fluctuation due to hosting two additional live performance events, each with approximately 5,000 attendees.

Table 6: Ongoing Cost Summary for the Entertainment/Convention Centre – Medium Demand

²⁸ Revenue and costs for the cultural centre have been omitted as it is proposed to be managed by a separate entity. The precinct’s ground maintenance is included and is assumed to be an in-kind contribution to the cultural centre.

Business Case Economic Analysis

The economic assessment considers Scenario One only – the concurrent development of the Entertainment/Convention Centre and Cultural Centre and applies the medium demand model.

This analysis is summarized below and detailed on pages 83-106 of the Business Case.

Cost Benefit Analysis

Cost-Benefit Analysis (CBA) is a systematic approach to calculating and comparing the benefits and costs of a course of action in a given situation. The key benefits of the project are anticipated to be the benefits derived from increased visitation and visitor spend to the region, facility operating revenues, existence (non-use) benefits to the community, and recreational amenity benefits for users.

The CBA has been undertaken for two referent groups - Wagga Wagga region and New South Wales (NSW). The project when examined at a 5% discount rate for the Wagga Wagga LGA, realises a Net Present Value (NPV) of $59.0 million and a Benefit Cost Ratio (BCR) of 1.43, highlighting the project will return $1.43 for every $1 of cost.

NSW Treasury applies cost-benefit analysis to weigh up risks and benefits versus costs to ensure the NSW Government delivers the best possible outcomes for the people of NSW. The CBA for NSW as the referent group, which accounts for some transfer of activity to the facility from other facilities in NSW, returns a NPV of -$3.4 million and a BCR of 0.97 at the base discount rate of 5%.

Table 7: Cost Benefit Analysis Results – Medium Demand Scenario

It should also be noted that community infrastructure such as the proposed Entertainment/Convention Centre and Cultural Centre typically delivers longer term social/ community benefits rather than short term financial returns, and thereby the choice of discount rate can greatly impact the perceived desirability as assessed using a CBA (as the value of longer-term impacts are discounted to a greater degree than shorter term impacts). At a lower discount rate of 3% and NSW as the referent group, the project is assessed to provide a positive NPV of $32.5 million and a BCR of 1.22. Under the lower discount rate, the project is deemed economically desirable.

Economic Impact Assessment

The $98.0 million development is estimated to directly deliver $79.0 million in output for local businesses, which is estimated to support $46.1 million in Gross Regional Product (GRP) for Wagga Wagga LGA and 317 full time equivalent (FTE) jobs. Post construction, there is estimated to be ongoing operational activity and visitor spend generated from the Project with $24.4 million in GRP and 205 FTE jobs.

Financial Implications

A funding grant of $491,875 was received from Regional NSW as part of the Business Case and Strategy Development Fund.

Instalment 1 of $393,500.00 has been received by Council and instalment 2 with a value of $87984.23 has been submitted to the funding body.

The project has been delivered within budget.

Policy and Legislation

Local Government Act 1993

Wagga Wagga Local Environmental Plan 2010

Link to Strategic Plan

Growing Economy

Objective: Wagga Wagga is an attractive location for people to live, work and invest

Encourage and support investment to develop Wagga Wagga

Risk Management Issues for Council

Risks specific to the business case and future planning of this project include:

· Council not securing funding to undertake the next stage of planning, which it is anticipated would result in a poor outcome for the community and region.

Internal / External Consultation

Internal consultation occurred with subject experts within the organisation as part of the preparation of the business case.

External consultation with identified stakeholders was conducted by Council and AEC as part of the preparation of the business case.

Council has also conducted comprehensive community engagement in relation to the Riverside precinct, over an extended duration, which encompasses:

· Riverside Wagga Wagga Strategic Master Plan 2010

· Wagga Wagga City Council Cultural Plan 2020-30

· Community Strategic Plan 2040 – Wagga View

· Local Strategic Planning Statement – Planning for the Future - Wagga Wagga 2040

· Wagga Wagga Innovate Reconciliation Action Plan 2022-2024

· Wagga Wagga’s Cultural, Creative and Economic Future - Have your say on exciting options for culture and entertainment venues for our region

Attachments

1.	Wagga Wagga Riverside Stage 3 - Community Engagement Report - Provided under separate cover
2.	Wagga Wagga Riverside Stage 3 Business Case - Provided under separate cover
3.	WWCC Cultural Centre Business Case - Provided under separate cover
4 .	WWCC Cultural Centre Business Plan - Provided under separate cover
5 .	WWCC Cultural Centre - Vision Statement - Provided under separate cover
6 .	WWCC Cultural Centre Project Prospectus - Provided under separate cover