2017-09-18 General Committee Agenda

GENERAL COMMITTEE MEETING AGENDA                                            18 SEPTEMBER 2017


The table highlights that with Digital Precinct providing management and curation services for the
Digital Hub the estimate annual net cost to Council will be approximately $185k per annum for
the first 5 years. This equates to a one off increase in the Tourism and Economic levy of 12.3%
(or say a price path approach over say 2 to 3 years).

As mentioned in the next steps section above the budget implications will need to be assessed
for current budget requirements in addition to how the Digital Hub will be funded in future
financial years.

Risks

Financial

New investment model – Council has not recently entered into a delivery model such as this with
Council potentially exposed financially due to the fixed costs associated with operating the Digital
Hub. The Management Agreement will be a critical mitigation tool to ensure financial
expectations are delivered. A regular and robust reporting framework will be included to ensure
the early detection of potential underperformance and assessment of financial risk likelihood and
consequence.

Fit out and equipment costs – Final fit out and equipment costs are currently unknown (estimates
at $375k) and were not included in the original financial modelling (or current capital works
budget). The fit-out cost responsibility between Council, Management Services Provider and
tenant requires further clarification and will be addressed in the Management Agreement and
funding implications identified.

Fraud / Misappropriation – The Management Services provider will have responsibility for
financial management of the Digital Hub including cash handling responsibilities. Appropriate
financial management processes will be required to be implemented and compliance policies and
procedures developed and agreed. The resourcing implications of this will need to be
determined.

Grants Revenue – A number of business support initiatives for the Digital Hub relies on
successful Australian and Queensland Government grant funding. Mitigation measures will be
required from Council to minimise the risk of the grants being unsuccessful in the form of actively
supporting applications and including the activity in the established reporting framework.

Resourcing

Management Services Provider – Key individuals have been identified by the tenderer in their
submission who are integral to the potential success of the Digital Hub, as they carry a ‘personal
brand’ and network that Council has placed value on. Key personnel commitment will be included
as a requirement in the Management Agreement

Council Contract and Building Management – Internal Council management of the contract and
physical building has not yet been considered nor budgeted. The incremental impact of this
Council asset is an unknown. Internal discussions need to scope and agree on the impact and
appropriate resource management requirements.

Safety

Workplace Health and Safety – the Management Agreement needs to include clear responsibility
for WHS requirements, auditing and reporting.




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