2021-10-12 Services & Organisation Committee Meeting Agenda

SERVICES & ORGANISATION COMMITTEE MEETING AGENDA                                  12 OCTOBER 2021


The lease stated that by this point, unless otherwise negotiated, the base rent should be 66% of
market rate, which was assessed as being $52,000. As such, Noosa FM’s base rent charge should
have been $34,320.
Management held a number of discussions with Noosa FM’s committee regarding the matter but
was unable to reach an immediate resolution. In late 2017, Noosa FM’s committee of the day agreed
to increase rental payments to $18,000 for 2018 only, with the view to negotiating arrangements
beyond this.
Subsequent to that agreement, the committee changed and the new committee communicated their
belief to Council that enforcement of the original lease terms would place significant financial strain
on the organisation and could result in its eventual collapse.
After further consideration, in December 2018 the Community Facilities Manager proposed to
Council that the current Noosa FM lease be extinguished and replaced with a shorter-term lease at
a reduced rental rate. At the time of that report, the latest option had not been activated by either
party and under clause 32 of the lease, it was essentially being held over under agreed terms and
conditions.
At its Ordinary Meeting on 20 December 2018, Council resolved:
That Council note the report by the Community Facilities Manager to the Services & Organisation
Committee Meeting dated 11 December 2018 and agree to:
A.    Extinguish the current Noosa FM lease at The J and replace it with a new 2 year lease (based
      on Council’s standard lease terms and conditions) with the option of further three x 1-year
      terms at Council’s discretion and an annual rental of $6,000 pa (plus CPI increases);
B.    Apply the exception to the requirement for the tendering of the lease under Section 236 (1) (b)
      (ii) of the Local Government Regulation 2012, as the lease is to a community organisation;
C.    Consider any financial implications of this new lease arrangement in BR3, and
D.    Reconsider Council’s position of providing both a rental subsidy and a Community Alliance
      grant to Noosa FM, when Noosa FM’s 3-year Community Alliance funding comes up for
      renewal in the 2019/20 community grants round.
In the time since the report was delivered to Council, the rental rate charged to Noosa FM was
reduced to align with the Council-adopted rate ($6,000pa + CPI), however, the new lease was never
formalised due to ongoing concerns about Noosa FM’s stability and long-term financial viability.
However, financial and operating updates provided to Council over the past couple of years show
that Noosa FM’s position has now stabilised and its viability appears sound. Noosa FM have
approached management about formalising a new lease in order to provide some longer-term surety
for the station. Management believe this is now a reasonable request and as such recommend that
this happens.

Officer’s recommendation
As Noosa FM have demonstrated financial and operational viability over the past two and a half
years, management recommends that Council extinguish the current lease (which is technically in
holdover despite non-compliance with the terms from Noosa FM over the past several years) and
replace it with a new 3-year lease with the option of a further two 3-year terms at Council’s sole
discretion. When considering the activation of future options, management will continue to take into
account the station’s operational and financial stability and viability, as well as assessing whether
the station’s services to the local community continue to be deemed to be delivering sufficient value.
It is recommended that the rental amount commence at its current rate of $6,175.22 p.a., with CPI
increases to apply thereafter for the first lease term in accordance with Council’s standard leasing
arrangements. Beyond the first rental term it is recommended that a rental review clause allow for
Council to review and potentially increase rent beyond CPI if Noosa FM’s capacity to pay materially
increases beyond current levels. This is suggested as a way to potentially realign the nature of the
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