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2017-10-13 Special Meeting
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AGENDA
Special Meeting
Friday, 13 October 2017
commencing at 2pm
Council Chambers, 9 Pelican Street, Tewantin
Committee: Crs Tony Wellington (Chair), Jess Glasgow, Ingrid Jackson,
Joe Jurisevic, Frank Pardon, Brian Stockwell, Frank Wilkie
“Noosa Shire – different by nature”
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Section 2
SPECIAL MEETING AGENDA 13 OCTOBER 2017
TABLE OF CONTENTS
ITEM PAGE
ATTENDANCE & APOLOGIES -
REPORTS
1 HINTERLAND ENVIRONMENTAL
CONSERVATION PROJECT 3
2 1617T130 PEREGIAN BEACH DIGITAL HUB - TENDER ASSESSMENT 46
MEETING CLOSURE -
Page 2 of 48
Section 3
SPECIAL MEETING AGENDA 13 OCTOBER 2017
CONFIDENTIALITY OF THIS ITEM WAS REMOVED -
1/11/2017
1 HINTERLAND ENVIRONMENTAL
CONSERVATION PROJECT
DOCUMENT INFORM AT ION
Author Chief Executive Officer, Brett de Chastel
CEO’s Office
Index ECM/ Subject/ Environment Levy
Attachments 1. Map
2. Draft Memorandum of Understanding
3. Environmental Values Assessment
4. Project Risk Register
5. Summary of assumptions used in Financial Analysis
6. Scenario Cashflow analysis
REASON FOR CLOSED SESSION
This report was considered in closed session in accordance with Section 275 (1) of the Local Government
Regulation 2012, which permits the meeting to be closed to the public for business relating to the
following:
(e) contracts proposed to be made by it; and
(h) other business for which a public discussion would be likely to prejudice the interests of the
local government or someone else, or enable a person to gain a financial advantage
Page 3 of 48
Section 4
SPECIAL MEETING AGENDA 13 OCTOBER 2017
EXECUTIVE SUMMARY
This report provides Council with an overview of a long term environmental project that has been
progressing over the last 9 months. This report doesn’t finalise the project. Rather, it proposes
that Council provide “in principle” approval to allow the project to proceed further to a more detailed
stage involving the development of formal contracts and agreements. Those agreements would
need to come back for Council’s consideration prior to their finalisation.
This project seeks to provide regional scale environmental protection of lands in the Ringtail and
Yurol forest localities that preserve both current State forest land and also convert significant
parcels of pine forest into long term conservation tenure. Hardwood plantation areas that are
currently subject to potential logging are also proposed to be protected. If this project comes to
fruition, there will be an additional 2,400 ha (approx.) of land incorporated into the long term
conservation estate of Noosa that will provide strategic environmental connectivity from the Ringtail
area to the Yurol/Pomona area. It not only protects current environmentally important land but will
also add to the bank of environmental land by including land to be rehabilitated from current pine
forestry practices. While providing broad scale connectivity to existing National Parks, this project
also has a significant potential benefit for biodiversity and specifically, the long term health of our
local koala population.
This project is very complex with multiple State agencies, Council, a timber harvesting company
and a local conservation NFP involved. The land tenure and tenure pathways are also quite
complex involving Planation Licence Areas, State forests, proposed Conservation Parks,
requirements for rehabilitation and ultimately, tenure pathways to National Park status. This level
of complexity also means that this project is not without risks and this report identifies the potential
risks and costs with this long term project. Like any decision, Council will need to weigh up the
potential benefits of this project (which are very significant in the context of long term environmental
outcomes) against the potential risks and costs. As CEO, my recommendation is that Council
proceed with this project because of the long term environmental benefits for our region. It is
arguably the largest and most significant environmental protection project in recent history.
However, in doing so, Council also needs to recognise that any project of this scale and complexity
does come with risks and costs.
At this stage, the recommendation is to proceed “in principle”. Why is this recommendation being
made at this stage? There are some sound reasons for doing so.
1. Having a non-binding Memorandum of Understanding (MOU) will allow the parties to outline
their intent and general framework for the project without getting bogged down in the details.
The MOU sets the framework for the development of the detailed transactional documents
(Deeds of Agreement etc). Those documents will need to come back to Council for
consideration and adoption;
2. The timing of this project is coming up against the potential calling of a State election when
the State government may go into caretaker mode. An “in principle” MOU would allow for an
announcement of the parties’ intent which would increase the likelihood of this project arriving
at a successful conclusion; and
3. Having Council review this project at this stage will enable consideration of the outcomes
that we are seeking to achieve and how we can mitigate risk in such a complex project. That
will enable these issues to be addressed during the development of the transactional
documentation.
The report sets out in some detail the background of this project and its progression to date. The
intention is that at this stage, the matter remain confidential to allow for the appropriate protocols
for an announcement by the State Minister for Environment to occur. However, as this is such a
significant project, it is important that all of the information be ultimately available to our community.
It is therefore proposed that the matter remain confidential until the project has been announced
by the Minister. Once that occurs, this report and all attachments should no longer be confidential.
Similarly, it is intended that the further report to Council on the transactional documents (Deed of
Agreement etc) would be provided to Council via our usual process (i.e. in open session, not
confidential session).
Page 4 of 48
Section 5
SPECIAL MEETING AGENDA 13 OCTOBER 2017
RECOMMENDATION
That Council note the report by the Chief Executive Officer to the Special Meeting dated 13 October
2017 regarding a proposed hinterland environmental conservation project and:
A. Note the proposed environmental benefits, risks and costs associated with the proposed
project; and
B. Approve the project “in principle” and authorise the Chief Executive Officer to proceed with
the Approved Actions as set out in the report.
REPORT
This report provides Council with details of a proposed project to create a major environmental
conservation area in the Yurol and Ringtail Forest localities to assist with biodiversity and in
particular, to create a major Koala corridor and preservation area. This report proposes that
Council enter into a Memorandum of Understanding (MOU) to provide “in principle” agreement for
the project to allow further detailed negotiations to occur between the parties.
1. Background
In January 2017, the Mayor and CEO met with Mr Michael Gloster from the Noosa Parks
Association (“NPA”) to hear about a proposal in relation to a large scale environmental protection
project in the Ringtail and Yurol Forest areas of Noosa Shire. The concept was interesting and
would lead to excellent environmental outcomes but was obviously a project of some complexity
involving multiple parties, complex land tenures, different State Departments and the commercial
interest of a plantation timber company.
Since January 2017, work has been undertaken to advance this project to the point where there is
now a strong likelihood that the project will proceed and this report proposes that the Council
support the project “in principle” subject to finalisation of the detailed documentation that would
bring the project to fruition. This project aims to conserve over 2,400 ha of land into long-term
conservation tenure that will significantly add to regional connectivity which will support biodiversity
including specific provision for Koala habitat.
2. The Parties
It would be beneficial to include a short summary at the beginning of this report of the parties
involved in this project.
HQPlantations (“HQP”)
A planation timber company which holds Planation Licence Areas (PLAs) across Queensland
including 1,492 ha in the Ringtail (879 ha) and Yurol (613 ha) Forest areas. The company
proposes to surrender its PLA in these areas in exchange for compensation. HQP manages
approximately 340,000 ha of forest throughout Queensland including both softwoods (pine)
and hardwoods.
Department of Agriculture and Fisheries (“DAF”)
This Department has oversight (via its Forestry Division) of the State Government’s interest
in both PLAs and State Forests that have timber extraction rights. The Minister for Agriculture
and Fisheries is the Hon Bill Byrne.
Department of Environment and Heritage Protection (“E&HP”)
This Department has policy and funding oversight of a range of environmental initiatives
including decisions about acquiring conservation estate. The Minister for Environment and
Heritage Protection is the Hon Dr Steven Miles.
Page 5 of 48
Section 6
SPECIAL MEETING AGENDA 13 OCTOBER 2017
Department of National Parks, Sport and Racing (“NP&SR”)
This Department includes the National Parks division which is the custodian and operator of
national parks in Queensland. This Department has several ministers but the Minister
responsible for the National Parks component (Minister for National Parks and the Great
Barrier Reef) is the Hon Dr Steven Miles.
Noosa Parks Association (“NPA”)
This is a not for profit community group based in Noosa incorporated under the Associations
Incorporation Act. They have a range of objects including the protection of the natural
environment in the greater Noosa - Cooloola region.
Noosa Shire Council (“the Council”)
The local government for the Shire of Noosa.
3. The Lands
The land holdings in the Yurol and Ringtail Forest areas are reasonably complex. Attachment 1
to this report contains a map showing the localities and different land tenures and land
characteristics. To summarise, the different areas are:
3.1. Land currently the subject of the existing Planation Licence Area
This comprises 1,492 ha. The underlying land tenure is State Forest but it is subject to the PLA
which gives HQP the right to plant and harvest timber for a 99-year period with approximately 90
years remaining on the PLA. Within the PLA, there are four separate types of land:
1) Hardwood areas – these are primarily Gympie Messmate areas that could otherwise be
subject to harvesting under the PLA. Most of these hardwood areas have been planted but
some are natural growth areas.
2) Pine areas – these are planted pine areas that are yet to be harvested. They range from
recently planted areas to mature pines ready for harvest.
3) Fallow areas – these are areas that have been harvested but have not yet been replanted
for forestry timber. Some of the areas have been fallow for 1 year while other areas have
been fallow for more than 7 years.
4) Natural forest areas – these are areas within the PLA that have not been subject to clearing,
planting or harvesting of timbers.
3.2. State Forest Land not the subject of the PLA to HQP
This comprises approximately 909 ha. This land is currently under the control of DAF and is able
to be used to extract timber resources as needed to meet the general obligations of DAF to provide
timber resources to timber suppliers. There is no specific contractual obligation for the State forest
land in these localities to one single planation company, but rather a broad obligation for DAF to
provide timber resources across Queensland for timber supplies.
3.3. National Park
There are already some areas of National Park in this region but they are quite fragmented and
not linked. One of the benefits of this project is to create a broad scale connectivity with existing
National Park areas. This will support biodiversity outcomes and specifically, Koala corridors and
habitat.
3.4. Freehold properties
There are freehold properties in the localities of the Yurol and Ringtail forests. These freehold
properties are not affected by this project.
Page 6 of 48
Section 7
SPECIAL MEETING AGENDA 13 OCTOBER 2017
3.5. Apiary Licences
There are approximately a dozen apiary licences in the area. These provide licence holders with
the right to enter and conduct bee keeping activities on the site. The apiary licences are not
intended to be affected by this project and will be maintained.
4. The Proposal “in principle”
After months of negotiations and consideration of different scenarios, the parties have reached "in
principle" agreement on the following:
4.1. Surrender of the PLA
HQP will surrender its PLA to the State within 5 years of the signing of the formal agreement.
HQP will receive compensation of $3.5M payable at the signing of the agreement for its
surrender of the PLA.
HQP will finalise its harvesting and removal of all pine located on the PLA area within that 5-
year period.
HQP has also agreed to forgo any rights it has in relation to the hardwood forests within its
PLA upon the signing of a formal agreement i.e. all existing hardwood areas in the PLA will
be protected from any logging.
HQP also has agreed to finalise its harvesting of its pine plantation using the "Guidelines For
The Management Of Conservation Handback Plantations, 2010” to ensure that the
opportunities for natural regeneration are maximised. This will be subject to their operational
requirements such as Workplace Health and Safety. A copy of this document has been
provided in the Councillors Room by way of background.
To facilitate the matters above, HQP will enter into a legally binding variation to their current
PLA agreement with DAF. Their current PLA agreement covers all of their PLA holdings
across the State and a legal agreement between DAF and HQP will vary that current
commercial agreement.
4.2. Funding Acquisition Costs
E&HP, Council and NPA will jointly fund the $3.5M cost of HQP surrendering their PLA in
equal shares i.e. the E&HP will fund one-third, Council will fund one-third and NPA will fund
one-third.
To minimise the risk to Council, E&HP will pay the full amount of $3.5M up front and the
remaining two-thirds will be paid into an interest bearing account held by E&HP (probably to
be held by QTC).
E&HP cannot draw down that two-thirds of the funding until two events occur:
(i) the State Forest Land (non PLA land) is substantially Gazetted into National Park (more
than 90% of that land is expected to be gazetted into National Park within the next year
or so with the balance being gazetted after 5 years); and
(ii) Council is made trustee of a Conservation Park for the PLA land (expected to occur
shortly after 5 years when HQP surrender their PLA). Further details on the tenure
pathways are set out below.
Interest on the funds held will be allocated by the State towards Koala protection projects in
Noosa Shire and the State is required to consult with the Council on potential projects.
Details on the funding contribution and timing of payments by NPA for their contribution are
set out below.
Page 7 of 48
Section 8
SPECIAL MEETING AGENDA 13 OCTOBER 2017
4.3. Remediation of the Pine Areas of the PLA and transfer to Conservation Park
At the end of the 5-year period, the PLA will be surrendered and the State will appoint Council
as sole trustee of the PLA land as Conservation Parks (one Conservation Park for the Yurol
PLA area and one for the Ringtail PLA area).
Council will undertake rehabilitation for 5 years with funding support from NPA. Details on
rehabilitation costs and processes are set out below.
At the end of the 5-year rehabilitation period, Council will not be required to undertake further
rehabilitation (but may choose to do so if it wishes). Council’s obligation to remediate is
capped at 5 years.
At the end of the 5-year rehabilitation period, the State will transfer the Conservation Park
lands into National Park status. That process is expected to be completed within 2 years of
that time (i.e. within 7 years of Council being appointed as trustee).
As an alternative, at Council's option, the parties could agree that the land can go directly
into National Park once the PLA is surrendered. This would effectively skip the Conservation
Park step and may require Council to contribute financially to the rehabilitation costs in lieu
of undertaking that ourselves. This alternative is something that may be explored at Council’s
option via the Transition Committee at that time and could only be done with the agreement
of all parties. The default position remains as Council being appointed as trustee of the
Conservation Parks.
4.4. Transfer of PLA Hardwood areas into National Park
Upon signing the formal legal agreements (discussed below), the State on a best endeavours
basis will convert as expeditiously as practical the PLA Hardwood areas to National Park (but
in any event within 5 years). This will depend on individual titles and tenure for those
Hardwood areas.
There are no remediation obligations to be imposed on Council with respect to the PLA
Hardwood areas.
4.5. Transfer of the non PLA State Forest areas into National Park
For the State Forest land not covered by the current PLA, DAF will identify which of those
parcels will not be required for access for timber resources. DAF have indicated that this will
be approximately 90% of that State Forest land. A process to transfer the State forest into
National Park will commence upon the signing of the agreement.
The remaining (approximately 10%) of that land will be held by DAF as State forest for a
period of 5 years to allow DAF to fulfil their obligations. (As a matter of interest, some of the
timber extracted from this area is used at agricultural shows for wood chopping events). At
the end of that 5-year period, DAF has advised that they will no longer require this resource
and they will finalise the use of this remaining state forest land for forestry purposes. This
land will then be transferred into National Park by the State.
4.6. Financial Contribution by Council
To facilitate the acquisition costs, it is proposed that funding be used from the Environment
Levy. The levy can be used to “acquire land or an interest in land”.
To facilitate remediation costs, it is also proposed that funding be used from the Environment
Levy. The levy can be used to rehabilitate or maintain land acquired under the Environment
levy.
Details of Council’s potential costs for both acquisition and remediation are contained in the
Finance section of this report.
Page 8 of 48
Section 9
SPECIAL MEETING AGENDA 13 OCTOBER 2017
4.7. Financial Contribution by NPA
NPA have agreed to fund one-third of the acquisition costs and also to make a contribution
towards the rehabilitation of the PLA pine area once Council becomes trustee of the
Conservation Park.
They propose to provide this funding over a period of time. For the acquisition component,
they will provide $500,000 upon the signing of the agreement, and $125,000 per year for four
years with the balance of their one-third contribution being paid the following year (approx.
$166,000).
For the rehabilitation component, they propose to contribute up to $125,000 per year for 5
years to assist with rehabilitation costs. Those contributions will commence the year
following their final payment towards the acquisition component. NPA have also indicated
that they would like to offer to further assist with rehabilitation via community working bees
to undertake replanting. This is in addition to their financial contribution.
All up, NPA proposes to contribute approximately $1.166M towards acquisition (spread over
6 years) and up to $625,000 toward rehabilitation (spread over 5 years).
A separate funding deed will be required between Council and NPA.
5. Contractual Arrangements
To facilitate this project, there is a two tiered approach proposed:
1) Memorandum of Understanding (MOU)
A MOU is proposed to set out in general terms how the parties will progress this project and its
general principles. An MOU is not legally binding but sets out the intention of the parties to work
towards an outcome. This is the stage we are presently at and this report proposes that Council
enter into an MOU to progress this to the next stage. The parties to this MOU will be Council, NPA,
HQP and the State. A copy of the current version of the draft MOU is provided at Attachment 2
to this report. As at the date of this report, two of the three State Government Departments, Council
and NPA have reviewed and agreed with the draft MOU. We are still awaiting a response from
DAF. HQP will provide feedback prior to the Special Council meeting and the CEO will provide an
update at that time.
2) Transactional Documents
If Council agrees to proceed with this project "in principle", we would then enter into detailed
negotiations regarding the transactional documentation to enable this project to proceed. Those
documents where Council is identified as a party would be referred back to Council for a decision
before proceeding. The transactional documents would comprise of the following:
a) A deed of variation to HQP’s PLA licence for their Queensland PLA areas. This will be an
agreement between HQP and the State (via DAF). It will include:
i. An obligation for HQP to follow the Guidelines For The Management Of Conservation
Handback Plantations, 2010 to maximise opportunities for natural regeneration in the
harvested areas.
ii. HQP forgoing their right to harvest any hardwood areas.
iii. HQP being obliged to complete the harvest of all existing pine areas within 5 years.
iv. HQP surrendering the PLA for the localities of Yurol and Ringtail forest within 5 years.
b) A deed between Council, NPA and the State (via E&HP and NP&SR) which addresses
funding and other obligations associated with the project. It will include:
i. How and when Council and NPA are to provide 2/3 of the funding for the acquisition.
Page 9 of 48
Section 10
SPECIAL MEETING AGENDA 13 OCTOBER 2017
ii. How the State will hold that funding until the pre-conditions for release are achieved
(i.e. gazettal of Council as trustee of the Conservation Parks for the PLA land and
gazettal of a substantial part of the non PLA land as National Park).
iii. Establishing a transition committee that will help manage the transition process over
the next 5 + years. The agreement will include a terms of reference for the Transition
Committee (see Schedule 2 of the Draft MOU); and
c) A Funding Deed between Council and NPA. That deed will include:
i. Details of how NPA will provide their funding for acquisition costs (including timing).
ii. Details of how NPA will provide their funding towards remediation costs (including
timing).
Council has retained McDonnells Solicitors to provide advice on the legal aspects of this project.
That firm has assisted in settling the terms of the MOU and will also provide specialist advice on
the transactional documents.
6. The Environmental Benefits
The purpose of this project is to provide regional environmental connectivity at a broad scale to
promote biodiversity. Specifically, this project will protect and create broad scale koala habitat in
the Noosa hinterland.
As part of an assessment process of this project, Council’s Environmental Services staff and E&HP
staff have undertaken as assessment of the both the actual and potential environmental values of
these lands as follows. An extract of an assessment by E&HP undertaken on the non PLA State
Forest land is also provided at Attachment 3. Obviously, the non-disturbed State Forest lands
have the highest current environmental values as identified in the attachment with the PLA areas
to re-generate over a number of years. Indeed, that is one of the unique elements of this project.
Not only does it protect lands with current high environmental values but in the long term, it will
also add to the conservation estate by remediating land that is currently being used for pine
planation. It also protects hardwood areas that would otherwise have been logged.
6.1 Ringtail Creek and Yurol State Forest Natural Values
Ringtail and Yurol State Forest form an important central corridor between the hinterland and the
coast connecting several existing National Parks and Council bushland reserves. The State
Forests consists of pine plantation, former pine plantation (fallow), hardwood plantation and
remnant vegetation, particularly along creek lines. Both plantation areas and fallow land exhibit
significant natural regrowth and will return to a natural vegetative state over time.
6.2 Remnant Vegetation
The majority of the remnant vegetation is classed as Endangered or Of Concern Regional
Ecosystems. Vegetation types include gallery and hoop pine rainforest, eucalypt forest, paperbark
and banksia woodland. Forty threatened species have been recorded in the State Forests.
Threatened fauna records include the Koala, the Glossy-black cockatoo, Mary River cod, Giant
barred frog, Tusked frog, Australian lungfish, Swamp crayfish and Honey blue eye. Threatened
flora records include Key’s boronia, Swamp stringybark and Southern penda. Significantly the
remnant vegetation supports high or very high wetland values which helps protect water quality in
the Noosa River and Six Mile Creek catchments. Koalas have been recorded in both the Yurol and
Ringtail State Forest areas and indicatively koala populations around Pomona (Yurol State Forest
side) are on the increase (based on feedback from local fauna carers).
Page 10 of 48
Section 11
SPECIAL MEETING AGENDA 13 OCTOBER 2017
6.3 Hardwood Plantation
It is likely that prior to clearing in the current plantation areas, the Yurol and Ringtail State Forests,
(in particular Yurol) supported significant koala populations. The majority of the hardwood
plantation is Gympie Messmate and although the plantation provides marginal habitat for koalas,
currently the forest allows koalas to safely move between other vital habitat areas. The hardwood
plantations also benefit many other species such as Flying-foxes, native mammals, reptiles and
birds.
6.4 Pine Plantation
Although largely consisting of exotic species, the pine plantation exhibits natural understory
regrowth and the forest also helps maintain water quality for the Noosa River and Six Mile creek
catchments. Fauna such as kangaroos, wallabies, birds and reptiles currently utilise the pine forest
areas for refuge and access to other habitat areas. There is a significant opportunity to rehabilitate
the pine plantation areas to a former pre-clearing extent and recover koala habitat as a means to
expand local koala populations.
6.5 Fallow Land
Some of the former pine plantation areas have been allowed to fallow. Fallow areas show
significant regrowth, albeit dominated by native pioneer species, but over time it is anticipated the
area will return to a semi-natural/natural condition. Some areas may require assisted rehabilitation
to fasten regrowth back to original koala habitat.
6.6 Summary of Environment Values
Conservation protection of the Yurol and Ringtail Creek State Forests will help protect significant
Endangered and Of Concern Regional Ecosystems and a number of specific threatened fauna and
flora species. Rehabilitating former pine plantation areas back to a pre-clearing vegetative structure
and diversity would help support and expand local koala populations and this will also benefit many
other associated fauna and flora species. The assessment by E&HP undertaken on the non PLA
State Forest land (see Attachment 3) provides an excellent overview of the environmental values
of this project.
6.7 Environment Levy Working Group
The Environment Levy Working Group has reviewed this proposed project and supports the project
due to the environmental outcomes that will be achieved. There is recognition that this project will
absorb a significant amount of the Environment Levy funding but the broad scale nature of the
regional connectivity warrants that approach.
More than 2,400 ha of significant land will be preserved for environmental protection purposes and
represents good value for money when compared to other recent Environment Levy acquisitions
as shown the table below.
Location Area (ha) Price Cost per ha
1280 McKinnon Drive, Cooroibah* 106 $2.7M $25,500
118 Johns Road, Cooroibah 49 $2.2M $44,000
Yurol-Ringtail Forest proposal (PLA area only) 1492 $3.5M (3 parties) $2,400
$1.2M (Council)** $805 (Council)
* This property is located at the northeast corner of the Ringtail PLA area and will have an important role to play
in the connectivity between the Yurol/Ringtail area and the Cooloola area.
** This only relates to the one third Council acquisition cost of the entire PLA area. Remediation costs associated
with the pine PLA areas (approx. 750ha) are dealt with separately in this report.
Page 11 of 48
Section 12
SPECIAL MEETING AGENDA 13 OCTOBER 2017
7. Long Term Opportunities
At this stage, no detailed work has been done on other long term opportunities that may arise from
this project. That can be done as the project unfolds over coming years. However, it is worth
flagging some of these possible opportunities at this stage to highlight the potential for this project
to bring additional benefits. Examples of opportunities may include:
7.1. Koala Research
This will be a high profile project that has the preservation and restoration of koala habitat as one
of its central elements. As such, this project will probably lend itself to long term scientific research
(probably associated with a University). It could also lead to a physical presence on the site to
provide an information centre or the like to support Koala research and community education. This
will be dependent on external funding opportunities and a cost/benefit analysis of any such
proposal.
7.2. External Grants
Based on recent history, there is likely to be external funding available for bushland restoration and
Koala preservation projects. For example, the Commonwealth has run Green Army projects in the
past and projects such as this could assist in rehabilitation and may provide for opportunities for
organisations such as Landcare to access such funding. In the private sector, philanthropists have
allocated funding towards environmental projects. For example, the Body Shop currently has on
offer funding of $420,000 towards projects that promote broad scale rehabilitation (Landcare is
currently examining that option). While these grant funds are possible, they have not been factored
into the costings at this stage but should be seen as potentially making the project less costly for
Council in the long term.
7.3. Carbon Offsets
We are currently exploring whether there will be any opportunity to gain carbon offsets for this
project. Initial inquiries indicate that there are significant hurdles before this project would qualify
but further research is being undertaken.
7.4. Noosa Trail Network
The Noosa Trail Network already passes through the Yurol forest section of this project. There
may be an opportunity to expand the trail network into the Ringtail forest area although that is of
course, dependant on our long term strategy for our trail network. Opportunities to expand the
mountain biking network at Tewantin are also possible. This is particularly the case where there
may be a "blank canvas" in the cleared pine PLA areas at Ringtail. The current Tewantin mountain
biking facility has been fully funded by the State and community groups and further development
in the Ringtail area is dependent on that third party funding.
7.5. Indigenous Food Trail
With proposed planting activities in the pine PLA areas, it may be possible to develop an indigenous
food trail that would provide an additional tourism experience and opportunities for our local
indigenous community to showcase their knowledge of local flora and their use in indigenous
culture. This could be explored as part of our ongoing development of our working relationship
with our local indigenous community but of course, would likely be dependent on external grant
funding and having a local indigenous organisation take responsibility for such a project.
Page 12 of 48
Section 13
SPECIAL MEETING AGENDA 13 OCTOBER 2017
8. Finance & Risk
8.1. Risk
Like any major project, there are risks associated with this proposal. The current project risk
register updated on 6 October 2017 is provided at Attachment 4 for Council’s consideration.
A summary of the key risks to be considered are outlined below.
8.1.1. State Government Electoral Cycle
Currently, one of the risks to delivering this project is the State Government election cycle. Special
arrangements apply in the period immediately before an election whereby the government
assumes a “caretaker role” from the time that the legislative assembly is dissolved, which ensures
that decisions are not taken that would bind an incoming government.
The basic caretaker conventions require a government to avoid implementing major policy
initiatives, making appointments of significance or entering into major contracts or undertakings
during the caretaker period. This project has been nearly 9 months in the making.
It is anticipated that the Premier could call a State election at any time over the next few months.
To maintain the momentum in progressing this project forward it is desirable to have the formal
MOU agreed between parties prior to the Premier announcing the election. Whilst this is not
imperative for the project to continue, it is a good way to expedite the process following the
upcoming election regardless of which party forms government. At this stage, it is probably not
possible to have formal transactional documents negotiated and signed by all parties prior to the
announcement of an election.
The Mayor and CEO have liaised with the current State Member of Noosa who has confirmed in
principle support for the project. The local Federal Member has also been briefed.
8.1.2. Tenure certainty
One of the initial concerns regarding this project was that due to the complexity of the current and
intended land tenure arrangements within the project area there was some uncertainty about the
mechanisms that Council could utilise to ensure that its funds invested in the project could assure
the desired outcomes. Essentially, there were initial concerns that Council (and NPA) might pay
significant funds for acquisition and rehabilitation without assurance that PLA would transition to
Conservation Park with Council as Trustee or that the Non PLA land would transition to National
Park.
One of the main reasons for this is that the transition of the project land (both PLA and Non PLA)
to protected status requires the State Government of the day to make an application to the
Governor in Council to dedicate the project area as a protected area under the Nature
Conservation Act 1992 (i.e. Conservation Park and National Park).
Pursuant to s30 of the Nature Conservation Act 1992, if an area that is to be dedicated as a
protected area is, or includes part of, a State forest or timber reserve set apart and declared under
the Forestry Act 1959, the regulation dedicating the area may revoke, in whole or part, the setting
apart and declaration of the State forest or timber reserve. It is important to note that the regulation
may be made only if the Legislative Assembly has, on a motion of which at least 28 days notice
has been given, passed a resolution requesting the Governor in Council to dedicate the area.
Given that the required mechanism for transitioning the project land to protected status would
require the State Government to exercise what is a discretionary power conferred on it by statue
(Nature Conservation Act 1992), pursuant to the principle of ‘unlawful fetter of discretionary power’,
the performance of that discretionary power could not be bound or legally enforced by any
contractual promise or commitment as to how a government will act at some time in the future.
This principle raised significant concerns for Council and legal advice has been obtained about
how we can mitigate this risk.
In order to address the issue of “unlawful fettering of discretion”, the State Government has
proposed that it will contribute all up front acquisition costs to be paid to HQP whilst Council and
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SPECIAL MEETING AGENDA 13 OCTOBER 2017
NPA’s portion is to be held in trust until such time that the project area is gazetted to protected
area status. Whilst the outcome is ultimately the same, issues of unlawful fetter are unlikely to be
raised successfully given that the ultimate agreement will not bind the State to exercise its relevant
discretion but simply confirm that if that process is completed, contribution funds of Council and
NPA will be transferred to the State and if not, they will be returned to Council and NPA. This
reduces Council’s financial risk.
8.1.3. Complexities of managing various parties in the transition process
Given that there are six parties to this complex project with different interests and that the project
will operate over a 10-year period, there is a real possibility that intended deliverables and progress
could be delayed if processes are not put in place to manage progress and address any issues as
they arise. To facilitate this, Council will note that the MOU provides for the establishment of a
transition committee and includes requirements that each party is responsible for.
8.1.4. Financial Risks
There are some financial risks associated with this project that Council should consider when
making its decision on the “in principle” approval.
The first financial risk is Council’s financial exposure to rehabilitation and management costs
associated with the Pine PLA once Council becomes trustee of the Conservation Parks. The issue
of rehabilitation has been analysed by Council’s Environment Officers, and rehabilitation has also
been independently peer reviewed by Noosa and District Landcare. This provides assurance to
Council that the potential rehabilitation costs can be reasonably relied upon to the extent outlined
in the financial modelling. The financial modelling set out below provides a “best and worst case”
scenario for rehabilitation of the 750 ha of pine PLA land that highlights the differences between
mainly natural regeneration compared to greater levels of assisted regeneration and active
reconstruction. While the most likely scenario based on the assessment of our Environment staff
is towards the lower case (mostly natural regeneration) the other scenarios have been modelled
to provide Council with the range of potential outcomes. This is not an exact science but the upper
and lower costs allow Council to consider the potential financial impacts of rehabilitation. Council
could also potentially receive grant funding towards rehabilitation costs.
Further, this is not the first time that pine lands in the broader region have been rehabilitated and
we can learn from the experience elsewhere. Our Environment staff have visited Bribie Island to
observe the significant natural regrowth that has occurred in the former pine areas without any
significant intervention.
In addition, we aim to manage rehabilitation obligations by way of contractual terms to ensure that
Council’s rehabilitation responsibilities do not go beyond 5 years from it becoming trustee of the
Conservation Park.
A second financial issue to consider is the funding being provided by NPA. Whilst there will be a
formal funding agreement in place between Council and NPA with respect to NPA’s obligations to
pay Council its contribution to acquisition costs (beyond the initial $500,000 to be paid directly to
the State) and rehabilitation, it is important for Council to be aware that NPA is a not for profit entity
(NFP).
An analysis of NPA’s audited financial statements for the last three financial years has been
undertaken by the CEO as part of our due diligence process. NPA’s funding obligations under this
project will be a large impost on that organisation’s finances for a number of years. Council should
be aware that NPA has cash reserves of more than $500,000 enabling it to meet its initial
contribution and based on current cash flows, it could also meet its ongoing obligations. However,
financial contributions by NPA beyond their initial acquisition contribution are dependent on it
maintaining its current income streams associated with two current leases. It is proposed that
Council and NPA enter into a formal funding agreement as part of the transactional arrangements,
but the options available to Council to enforce a funding agreement in relation to a not for profit
organisation are limited. That is indeed the case for any not for profit organisation.
Page 14 of 48
Section 15
SPECIAL MEETING AGENDA 13 OCTOBER 2017
Accordingly, Council should recognise that there is some potential uncertainty with respect to future
financial contributions from the co-funding NFP. Nevertheless, it is also important to note that NPA
has played an important and valuable role in this project to date. Discussions throughout this
project have certainly evidenced a strong long term commitment by NPA to this project and indeed,
this project would not be possible without their valuable contribution in bringing the parties together
to achieve the long term environmental outcomes.
In addition to the above, there is also a risk that there will be a perception within the community
that this project is an example of cost shifting from the State Government to Council given that the
land will eventually become National Park. Essentially, this project would not proceed without
Council and NPA’s financial contributions. The State has confirmed that the required rehabilitation
costs are not available in its budget. The project accelerates the permanent protection of land
which will directly benefit the Noosa community and allows the Council to leverage its funds from
the Environment Levy to protect a greater area than has historically been the case with normal
purchases. Further, in the long term, Noosa ratepayers will not have to pay ongoing maintenance
costs of the conservation land as it will be the responsibility of National Parks.
8.1.5. Native Title implications and other future land use matters
Legal advice has confirmed that Native Title rights are not extinguished in the project area. This is
not considered a significant risk in terms of future uses for the area. It is considered that indigenous
use the project area will be negotiated as part of a broader Indigenous Land Use Agreement
currently being considered separately to this project. Future discussions and consultation should
take place between Indigenous groups, the State and Council with regard to desired use for the
project area when it comes under protected environmental status.
Ultimately, a management plan will be needed for the area, which should involve community
consultation with all stakeholders.
There are a number of other risks for Council’s consideration outlined in the Project Risk Register
provided at Attachment 4.
8.2. Finance
8.2.1. Financial Modelling
Financial modelling has been completed in accordance with Council’s ‘Use of Project Decision
Framework Toolkit’ Organisational Policy to ensure that an informed decision can be made relating
to the potential significant ongoing investment of ratepayer funds in this project.
The financial inputs relating to the modelling specifically relate to the initial upfront acquisition costs
(land acquisition, legal costs, management plan) and future land remediation and management
costs (tree planting, weed management, fire and pest management, signage, gates) over a five-
year period following Council assuming trusteeship of the conservation parks (in approximately
2023). Attachment 5 provides a summary of the assumptions used for the analysis.
For the purposes of informing Council on the likely total cost of this project the base case scenario
is being presented. The difference between the base case and other two remediation scenarios
relates specifically to the intensity of remediation and the associated cost implications (i.e. ranging
from base case natural regeneration through to full site reconstruction). This intensity difference is
outlined for information in the table below.
Page 15 of 48
Section 16
SPECIAL MEETING AGENDA 13 OCTOBER 2017
Given this project will cover a number of future years, Net Present Value Analysis (NPV) has been
used to compare the three scenarios and identify the likely total cost of the remediation component
of the project (in 2017 dollars). The table below provides a summary of the total cost of each
scenario in addition to the investment required per ratepayer to fund the project.
Note 1: Represents the total potential costs over the 5 year rehabilitation period.
Note 2: For modelling purposes, the additional contribution by NPA towards rehabilitation (up to $125,000 pa
for 5 years totalling $600,000 plus inflation) has been excluded. The payment of these funds by NPA
would reduce the above costs by the equivalent contribution over the 5-year period for each scenario.
Note 3: For modelling purposes, potential grant funds have been excluded. Any grant funds received would
reduce the above costs.
The detailed cashflows associated with the total project costs for each scenario are provided for
information in Attachment 6. A summary snapshot is outlined below.
Figure 1: Scenario Cashflows
$4,000,000
$3,500,000
$3,000,000
$2,500,000
$2,000,000
$1,500,000
$1,000,000
$500,000
$0
($500,000)
2018 2019 2020 2021 2022 2023 2024 2025 2026 2027
Basecase (Natural Regeneration) Assisted Regeneration Reconstruction
Page 16 of 48
Section 17
SPECIAL MEETING AGENDA 13 OCTOBER 2017
It should be noted that there are a myriad of other potential scenarios that have been modelled
(i.e. starting the remediation early, undertaking remediation for 10 years, the project being delayed
etc) however for the purposes of the analysis the three scenarios above have been assumed to
reflect the realistic options available based on current information.
8.2.2. Funding
It is assumed that the project will be funded in its entirety by the Environment Levy. The estimated
levy balance at the end of the 2017/18 financial year is $1.3 million (after also allowing for the
Johns Landing purchase). Based on a business as usual approach (i.e. revenue levels do not
change nor the current levels of contribution to conservation agreements and the Noosa Biosphere
Reserve contribution), the levy can accommodate the costs associated with all three scenarios
presented.
Figure 2: Projected Environment Levy Restricted Cash Balance
$14,000,000
$12,000,000
$10,000,000
$8,000,000
$6,000,000
$4,000,000
$2,000,000
$0
2018 2019 2020 2021 2022 2023 2024 2025 2026 2027
Basecase (Natural Regeneration) Assisted Regeneration Reconstruction
Obviously tying up funds in this investment restricts the ability for the levy to self-fund other
significant environmental land acquisition opportunities. This does not however stop Council from
looking at other investment approaches moving forward (i.e. external or internal loan funding to
smooth cash flows).
8.2.3. Rehabilitation
There are generally four approaches to restoring natural habitat. These approaches are outlined
below.
Ecological Restoration Circumstances Where Examples
Approach Appropriate
Natural Regeneration Where resilience is intact and Where fencing to exclude stock
recovery is automatic with the enables natural regeneration of
removal of the cause of damage. plants.
Assisted regeneration Where degrees of resilience exist Where lantana and exotic
and ‘triggering’ interventions (either groundcovers affect a rainforest
disturbance or resource provision) understorey.
can effect recovery by natural
regeneration.
Page 17 of 48
Section 18
SPECIAL MEETING AGENDA 13 OCTOBER 2017
Ecological Restoration Circumstances Where Examples
Approach Appropriate
Reconstruction Where resilience is depleted, and Where native vegetation has been
abiotic or biotic elements need removed and is not naturally
wholesale importation or major recruiting, but site topography
amendment before recovery can remains unchanged.
commence.
Fabrication Where conditions are permanently Where topography has changed so
(Type conversion) changed and better-adapted local drastically, that the original
systems can be regenerated or ecosystem can no longer be re-
constructed to restore integrity to the established on the site.
landscape
Four Common restoration approaches (modified from McDonald, 2006)
In the context of the rehabilitation of the pine PLA areas, the following types of work would be
potentially required.
Approach Management Methods
Natural regeneration Largely fire and people Monitoring and patrols. Collaboration
management (general operational with National Parks and Rural Fire
costs, not rehab costs) Service
Assisted regeneration Installation of absent structurally Installation of Eucalyptus, Syncarpia,
critical tree species - Eucalyptus, Lophostemon and Corymbia at
Syncarpia, Lophostemon and densities of 5mx5m (400stems/ha)
Corymbia that are canopy Control of Transformer Weeds - Spot
dominants of wet sclerophyll forest spraying. Cut and swab with
in Queensland. herbicide.
Control of transformer weeds. Pine wildings can be cut at base or
Camphor Laurel has been recorded treated with herbicide and left in situ”
within pine areas in small – this is quicker, cheaper and safer
concentrations. Cat’s claw creeper than chainsaw felling.
or Madeira vine have not been Existing dense areas of lantana can
detected in pine plantation areas but be cleared with a posi-track followed
creek lines outside of the pine areas up by spot spraying. Dense lantana
have not been inspected. Currently patches occur only in older fallow
pine wildlings occur in low areas.
concentrations across pine fallow
areas and it is anticipated that
wildlings will require control in the
future. Groundsel has been
recorded in small concentrations.
Lantana is extensive in some areas
of the pine plantation, particularly in
Ringtail north and Yurol south.
Reconstruction Includes bare areas slow to Mulching and tree planting. Posi-
regenerate. Strategic targeting of track with mulching head. Follow up
areas of high density lantana which spot spraying.
is restricting growth of emergent Planting if area is not naturally
vegetation. regenerating.
Fabrication No fabrication required at this stage N/A
Page 18 of 48
Section 19
SPECIAL MEETING AGENDA 13 OCTOBER 2017
The degree to which we apply different mixes of these different rehabilitation treatments will be
determined when we adopt the Management Plan for the Conservation Parks. There are already
significant fallow areas in the PLA area showing substantial natural regeneration. Some of these
areas are at a one-year, three-year and seven-year fallow timeframe allowing identification of the
natural regeneration that can and has occurred.
To assist with consideration of the issue at this stage, we have modelled three different scenarios
in the financial analysis with each one showing the maximum cost over a five-year period. The
higher the intervention (e.g. reconstruction, the higher the cost). Conversely, the more natural
regeneration, the lower the cost.
9. The Way Forward - Approved Actions
If Council wishes to proceed with this project in principle, the following actions would be need to
be approved by Council:
Authorise the CEO to enter into a Memorandum of Understanding generally in accordance with
the terms of the draft MOU contained in Attachment 2 to the report to achieve the overall
project objectives;
Authorise the CEO to work with the other parties to develop the required transactional
documents and to report back to a future Council meeting with those transactional documents
for Council’s consideration;
Authorise the CEO to remove the confidentiality associated with this report and project once
the project has been publically announced by the Minister for the Environment.
10. Acknowledgments
I would like to acknowledge the following people and organisations who have made this project
possible to date. In relation to our Council staff, it should be noted that this work was undertaken
over and above their normal day to day roles.
Council Environment Officers - Their detailed analysis of the environmental attributes of the
relevant land have been invaluable. They have physically traversed the entire site and
analysed soil types, vegetation etc to determine the probable level of natural regeneration
required for the pine PLA lands. Our Principal Environment Officer has also visited the Bribie
Island former pine plantation areas to view and compare natural regeneration of that site.
Council’s Governance Advisor has provided important governance advice and support on this
project focusing on risk analysis and mitigation as well as liaison with legal advisors.
Council’s Executive Officer has assisted in project co-ordination, particularly in bringing the
project to fruition in recent weeks.
Noosa Parks Association have provided an important role in bringing this project and concept
to the other parties for consideration. They have successfully advocated for this project that
will have a long term benefit to the environment estate in the Noosa Shire.
HQP have evidenced very strong corporate responsibility in line with their adopted corporate
values and their adopted Forest Stewardship Certification program. They have been willing to
engage and consider this project recognising the benefits to the Noosa environment while also
ensuring that the rights of their shareholders were respected.
State Agencies – There has been excellent co-operation and support from senior bureaucrats
in a number of state agencies and in particular, E&HP and NPS&R.
Page 19 of 48
Section 20
SPECIAL MEETING AGENDA 13 OCTOBER 2017
Previous Council Consideration
Nil.
Consultation
External Consultation - Community & Stakeholder
HQPlantations (CEO);
Noosa Parks Association (President);
Department of Environment and Heritage Protection;
Department of Agriculture and Fisheries;
Department of National Parks, Sport and Racing;
Hon Dr Steven Miles, Minister for Environment and Heritage Protection; and
Noosa and District Landcare
Internal Consultation
Mayor;
Leadership Team;
Principal Environment Officer;
Environment Officer;
Governance Advisor;
Executive Officer;
Environment Levy Working Group.
Departments/Sections Consulted:
X Chief Executive Officer X Community Services X Corporate Services
X Executive Officer Community Development Financial Services
Executive Support Community Facilities ICT
Libraries & Galleries Procurement & Fleet
Local Laws Property
Waste & Environmental Health Revenue Services
X Executive Services X Environment & Sustainable Development Infrastructure Services
Community Engagement Building & Plumbing Services Asset Management
Customer Service Development Assessment Buildings and Facilities
X Governance Economic Development Civil Operations
People and Culture X Environmental Services Disaster Management
Strategic Land Use Planning Infrastructure Planning,
Design and Delivery
Page 20 of 48
Section 21
SPECIAL MEETING AGENDA 13 OCTOBER 2017
Page 21 of 48
SPECIAL MEETING AGENDA 13 OCTOBER 2017
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Page 21 of 48Section 22
SPECIAL MEETING AGENDA 13 OCTOBER 2017
Page 22 of 48
SPECIAL MEETING AGENDA 13 OCTOBER 2017
ATTACHMENT 2
Memorandum of Understanding
between
the State of Queensland
acting through the Department of Environment and Heritage Protection, the Department
of Agriculture and Fisheries ('DAF') and the Department of National Parks, Sport and
Racing (‘State’)
and
the Noosa Shire Council (‘Council’)
and
the Noosa Parks Association, Incorporated (‘NPA’)
and
HQ Plantations Queensland (‘HQP’)
ITIS AGREED as follows:
1. SCOPE OF THE MEMORANDUM OF UNDERSTANDING (‘MOU’)
1.4 The objective of this MOU is to reflect’an intention between the parties to:
1.1.1 convert the Yurol and Ringtail State Forests as delineated on the Plan
(Schedule 3) to protected area tenure/s as is better detailed in the Proposed
Obligations of the Parties and Terms of Reference; and
1.1.2 to enter into 2 formal binding legal agreements which will oblige them to do
what Is required on their respective parts to achieve that.
1.2 For the purposes of this MOU the subject parts of the Yurol and Ringtail State Forests,
which are delineated on the Plan (Schedule 3), are defined as follows:
1.2.1. Plantation Licence Area (PLA), which comprises approximately 1,492 ha of
State Forest subject to one or more plantation licence/s in favour of HQP under
the Forestry Act 1995. The area/s subject to the PLA is further categorised as
follows:
(a) Hardwood PLA made up of primarily Gympie Messmate;
Page 1
Page 22 of 48Section 23
SPECIAL MEETING AGENDA 13 OCTOBER 2017
Page 23 of 48
SPECIAL MEETING AGENDA 13 OCTOBER 2017
(b) Pine PLA made up of soft pine plantings ranging from recently planted
pines to mature pines yet to be harvested;
(c) Fallow PLA made up of areas that have been harvested but have not
yet been replanted. Some of these areas have been fallow for 1 year
whilst other areas have been fallow for more than 7 years; and
(d) Natural Buffer PLA made up of areas within the PLA that have not been
subject to clearing, planting or harvesting of timber.
1.2.2 State Forest Area Non-PLA, which comprises approximately 910 ha of State
Forest Timber Reserve under the Forestry Act 1995. The area of State Forest
subject to this MOU is further categorised as follows:
(a) Available State Forest made up of areas within the State Forest
Reserve that have not been subject to clearing).planting or harvesting of
timber and are not currently allocated for use; and
(b) DAF Required State Forest which is made up of areas)within the State
Forest Area required by DAF for other forestry needs for up to 5 years,
1.3. The parties agree to collaborate and further enhance. their relationship to realise the
long-term environmental benefits of preservingthe Land via protected tenure status for
future generations.
1.4 This collaboration is currently intended to focus on, but is not limited to, the following
areas:
1.4.1. the purchase by the State of harvesting and licence rights from HQP;
1.4.2 the State, Council and,NPA jointly funding costs incurred to transition the Land
to protected area tenure and
1.4.3. joint.engagement on issues relating to the management and rehabilitation of
the Land for environmental outcomes;
and the parties intend to negotiate with a view to entering into binding legal agreements
in relation to those matters.
2. ESTABLISHMENT OF A JOINT TRANSITION COMMITTEE
2.1. A joint transition committee comprising representatives of the parties is to be
established to provide a coordinated approach to the transition of the Yurol and Ringtail
State Forest lands to protected area tenure and on issues relating to management and
rehabilitation of the Land for environmental outcomes.
Page 2
Page 23 of 48Section 24
SPECIAL MEETING AGENDA 13 OCTOBER 2017
Page 24 of 48
SPECIAL MEETING AGENDA 13 OCTOBER 2017
2.2 The terms of reference for the joint transition committee are as set out in Schedule 2.
3. STATUS OF THE MOU
3.1 The parties acknowledge that the provisions of this MOU are not legally binding (except
for clause 7, ‘Confidential Information’). Final policy decisions and legislative
enactments remain the responsibility of the respective departments of the State and the
Council and final contractual decisions remain the responsibility of each party.
3.2 Nothing contained in this MOU will fetter, act as an estoppel or as an agreement about
the exercise of discretion or the making of a decision.or subordinate legislation under
any law.
4. TIMEFRAME, MODIFICATION AND TERMINATION
4.1 This MOU commences on the date the last party signs this,MOU and will be operative
for a period of seven (7) years from that date, unless otherwise.varied by the parties or
terminated or until superseded by the State/HQP Agreement and _ the
State/Council/NPA Agreement both being entered into.
4.2 Any variation of this MOU must bein writing and signed by all parties.
5. |PROPOSED OBLIGATIONS OF THE PARTIES
5.1 Subject to.all the parties reaching agreement the parties confirm their intentions to enter
into (as the Case may be) an agreement between the State (acting through DAF) and
HQP (State/HQP Agreement), and the agreement between the State (acting the E&HP),
Council and. NPA (State/Council/NRA Agreement).
5.2 The terms of the State/ HQP Agreement are intended to include:
5.2.14. Commercial arrangements which will be negotiated between the State and
HQP without involvement by either Council or NPA and which when agreed
willbe privy only to the State and HQP; and
5.2.2 Arrangements for the surrender by HQP of the plantation licence rights in the
PLA and other operational arrangements dealing with ongoing logging and
thinning, access and rehabilitation and related matters, and Council and NPA
will be entitled to be heard in negotiations between the State and HQP in
respect of those matters, and details of the final agreement in respect of those
matters will be formally disclosed to Council and NPA as part of the
State/Council/NPA Agreement given Council's and NPA's interests in those
matters as part funders of the payment to be made to HQP by the State.
Page 3
Page 24 of 48Section 25
SPECIAL MEETING AGENDA 13 OCTOBER 2017
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SPECIAL MEETING AGENDA 13 OCTOBER 2017
5.2.3 Without limiting the generality of the previous sub-clause the State/ HQP
Agreement will:
(a) set out rehabilitation obligations on the part of HQP and will require that
HQP carries out those obligations in accordance with the Rehabilitation
Standard ‘Guidelines For The Management of Conservation Handback
Plantations, 2010’ document for the entire PLA subject to HQP’s
operational requirements and in particular, any Workplace Health and
Safety requirements;
(b) Require that all pine regardless of age will be removed by HQP from the
Pine PLA and Fallow PLA within 5 years regardless of age.
5.3 The terms of the State/Council/NPA Agreement are intended to include:
5.3.1. An obligation on Council to pay to the State $1,833,333.00 excluding GST to
partly fund the payment to be made by the State to HQP under the HQP
Agreement;
5.3.2 An obligation on NPA topay:
(a) To the State $500,000.00,excluding GST to partly fund the payment to
be made by the State to HQP under the HQP Agreement;
(b) _ To Council. $666,666.00 excluding GST to fund NPA’s remaining agreed
payment to the State, which Council initially paid to the State on NPA’s
behalf, which amount will be payable in tranches at dates to be mutually
agreed and reflected in aseparate deed of funding between Council and
the N PA.
5.3.3», A provision confirming that the payments to be made to the State will be held
by the State in an interest bearing account with Queensland Treasury
Corporation until the payment obligations become unconditional.
5.3.4 A provision confirming that the release of the capital components of the
payments to be made to the State will be subject to certain conditions being
satisfied, including:
(a) at least 90% of the State Forest Area being gazetted as National Park
under the Nature Conservation Act, 2002 (Qid.),and
(b) The area/s of the PLA, which is/are not transferred to National Park being
gazetted as Conservation Park under the Nature Conservation Act 2002
(Qid) with Council as Trustee.
Page 4
Page 25 of 48Section 26
SPECIAL MEETING AGENDA 13 OCTOBER 2017
Page 26 of 48
SPECIAL MEETING AGENDA 13 OCTOBER 2017
5.3.5 A provision confirming that should the conditions set out in clause 5.3.4 not be
satisfied within agreed timeframe of 7 years the payments made to the State
will be refunded by the State to Council and NPA.
5.3.6 A provision confirming that interest accrued on the payments to be made to the
State will be used by the State towards Koala preservation projects within the
Council's Council area and a requirement for the State to consult with Council
and NPA on potential preservation projects.
5.3.7. An obligation on the State to not agree to alter or vary the operation terms of
the State/HQP PLA Agreement for the Yurol and Ringtail Forest areas without
the prior written consent of both Council and NPA.
5.3.8 An obligation on the State on a. best endeavours basis to:
(a) Convert as expeditiously as may be practicable the early transfer of
Available State Forest Area and the Hardwood PLA and Natural Buffer
PLA to National Park; and
(b) As soon as may be practicable but.in any event within 7 years either:
(i) | convert the DAF Required State.Forest Area and the remaining
PLA (Pine and Fallow) to.Conservation Park under the Nature
Conservation Act,2002 (QId) with, Council as Trustee; or
(ii), convert the DAF Required State Forest Area to National Park.
5.3.9 AtCouncil’s option, but with the agreement of all parties, Council may offer to
pay the State a financial contribution to be negotiated and agreed between
Council and the State for rehabilitation costs relating to Pine PLA and Fallow
PLA to transition directly to National Park as opposed to becoming the
responsibility of Council.
5.3.10 ArightforCouncil to request and for the State to consider in good faith Council
being granted early access to parts of the Land then controlled by the State in
the event that Council may be able to access governmental or philanthropic or
other external funds to assist in paying for rehabilitation of parts of the Land
which are likely to be required to be rehabilitated prior to or as part of later
tenure conversion/s.
5.3.11 The setting up of a joint transition committee comprising representatives from
Council, NPA, all Queensland Government Departments involved in the
Project and HQP, which committee will assist in the carrying out of the Project
Page 5
Page 26 of 48Section 27
SPECIAL MEETING AGENDA 13 OCTOBER 2017
Page 27 of 48
SPECIAL MEETING AGENDA 13 OCTOBER 2017
and allow appropriate input from its stakeholder members, and which will
operate in accordance with the Terms of Reference.
6. MOU MANAGEMENT
6.1 Each party nominates the Contact Officer for the purpose of this MOU.
6.2 Aparty’s Contact Officer is responsible for:
6.2.1 receiving communications;
6.2.2 issuing and signing notices; and
6.2.3. responding to requests or directions;
on behalf of that party in relation to this MOU.
6.3 The Contact Officers, or any officer appointed by each Contact Officer, will meet as
reasonably required by the parties for the purpose of discussing,the performance of this
MOU.
7. INFORMATION
7.1 Subject to clause/7-2 a Recipient must not:
7.1.1 disclose.Confidential Information tova third party; or
7.1.2 use Confidential Information other than for the purpose of this MOU.
7.2 Exceptions
A party may disclose Confidential\information:
7.2.1 with thesother party’s prior written consent;
7.2.2 toa professional adviser, financial adviser, banker, financier or auditor if that
person is obliged to keep the information disclosed confidential;
7.2.3. to any of.its Representatives who are bound to keep the information
confidential and to whom it is necessary to disclose the information;
7.2.4 to comply with the law, or a requirement of a regulatory body;
7.2.5 to the responsible Minister administering the department or the agency and
their personal and departmental advisers;
7.2.6 in response to a request by the Parliament or a Committee of the Parliament
of the State of Queensland; or
7.2.7 where disclosure is required to be made in accordance with established
governmental policies, procedures or for public accountability purposes.
Page 6
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SPECIAL MEETING AGENDA 13 OCTOBER 2017
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SPECIAL MEETING AGENDA 13 OCTOBER 2017
8. LIABILITY
The parties agree that they enter into this MOU and the purpose entirely at their own risk and
without exception.
9. DISPUTE RESOLUTION
The parties agree that any dispute arising during the course of this MOU is to be dealt with
by a process of escalation through each party’s respective management hierarchy.
10. GENERAL
10.1 Assignment
A party must not assign, novate or subcontract the whole or any part of this MOU without
the prior written consent of the other party, such consent not to be unreasonably
withheld or delayed.
10.2 Notices
Each communication (including each notice),consent, approval, request and demand)
in connection with this MOU to be given by either party to the other must be in writing
and delivered to the address specified in Schedule 1 (or any other address notified from
time to time) by,hand, posted by pre-paid post, or sent by facsimile transmission or
email.
10.3 No relationship
Nothing»contained in this MOU will be taken as giving rise to any employment, agency,
partnership orjoint venture relationship,between the parties.
11. DEFINITIONS AND INTERPRETATION
11.1 Definitions
In this MOU:
Confidential Information means all information, trade secrets and knowledge of or
disclosed by a party (the Discloser) to another party (the Recipient) that:
11.1.1 is by its nature confidential;
11.1.2 is designated or marked by the Discloser as confidential; or
11.1.3 the Recipient knows or ought to know is confidential,
11.1.4 but does not include information which:
11.1.5 is or becomes public knowledge other than by breach of this MOU or any other
confidentiality obligation; or
Page 7
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SPECIAL MEETING AGENDA 13 OCTOBER 2017
Page 29 of 48
SPECIAL MEETING AGENDA 13 OCTOBER 2017
11.1.6 is independently developed by a party while having no knowledge of or access
to the other party’s Confidential Information.
Contact Officer means the contact person for each party specified in Schedule 1.
Plan means the plan attached as Schedule 3.
Project means the Yurol and Ringtail Forest Conservation and Koala Corridor Project
as contemplated by this MOU.
Representative means an employee, agent, officer, director, contractor, subcontractor
or other authorised representative of a party.
Rehabilitation Standard means the standard referred to in the 'Guidelines For The
Management Of Conservation Handback Plantations, 2010' document.
Terms of Reference means the Terms of Reference of the joint transition committee,
a copy of which is contained in Schedule 2.
11.2 Interpretation
In this MOU unless the context indicates a contrary intention:
11.2.1 areference to a document (including this MOU) is to that document as varied,
novated, ratified or replaced from time,to time;
11.2.2 areference to a statute includes its delegated legislation and a reference to a
statute or delegated legislation or a provision of either includes consolidations,
amendments, re-enactments and replacements;
11.2.3 a wordimporting,the singular includes the plural (and vice versa), and a word
indicating a gender includes every other gender;
11.2.4) areference toa party, clause, schedule, attachment or annexure is a reference
tova party, clause, schedule, attachment or annexure to or of this MOU, and a
reference.to this MOU includes all schedules, attachments and annexures to
it;
11.2.5 includes in any form is not a word of limitation;
11.2.6 areference to $ or dollar is to Australian currency; and
11.2.7. if a word or phrase is given a defined meaning, any other part of speech or
grammatical form of that word or phrase has a corresponding meaning.
Page 8
Page 29 of 48Section 30
SPECIAL MEETING AGENDA 13 OCTOBER 2017
Page 30 of 48
SPECIAL MEETING AGENDA 13 OCTOBER 2017
Schedule 1
Contact Officers
State
1. Department of Environment and Heritage Protection:
Party Name: State of Queensland acting through the Department of
Environment and Heritage Protection
ABN: 46 640 294 485
Street Address: Level 5, 400 George Street, Brisbane QLD 4000
Contact Officer Name: Lisa Watts, A/Director
Contact Officer Postal Level 5, 400 George Street Brisbane Q 4000
Address:
Contact Officer Telephone: 07 3330 6080
Contact Officer Facsimile: n/a
Contact Officer Email: [email protected]
2. Department of Agriculture and Fisheries:
Party Name: State of Queensland acting through the Department of
Agriculture,and Fisheries
ABN: 66 934 348 189
Street Address: [insert details]
Contact Officer Name: [insert details]
Contact Officer Postal [insert details]
Address:
Contact Officer Telephone: __ [insert details]
Contact Officer Facsimile: [insert details]
Contact Officer Email: [insert details]
Page 9
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SPECIAL MEETING AGENDA 13 OCTOBER 2017
Page 31 of 48
SPECIAL MEETING AGENDA 13 OCTOBER 2017
3. Department of National Parks, Sport and Racing:
Party Name: State of Queensland acting through the Department of National
Parks, Sport and Racing
ABN: 11 322 391 452
Street Address: [insert details]
Contact Officer Name: [insert details]
Contact Officer Postal [insert details]
Address:
Contact Officer Telephone: __ [insert details]
Contact Officer Facsimile: [insert details]
Contact Officer Email: [insert details]
Noosa Council:
Party Name: Noosa Shire’Council
ABN: 97 969 214.121
Street Address: 9 Pelican Street, Tewantin, QLD 4565
Contact Officer Name: Brett de Chastel, CEO
Contact Officer.Postal P.O Box 141, Tewantin QLD 4565
Address:
Contact Officer Telephone: 07 53296500
Contact Officer Facsimile: n/a
Contact Officer Email: [email protected]
Page 10
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SPECIAL MEETING AGENDA 13 OCTOBER 2017
Page 32 of 48
SPECIAL MEETING AGENDA 13 OCTOBER 2017
Noosa Parks Association:
Party Name: Noosa Parks Association Incorporated
ABN: 18 870 049 909
Street Address: Environment Centre, 5 Wallace Drive, Wallace Park, Noosaville
QLD 4567
Contact Officer Name: Michael Gloster, President
Contact Officer Postal P O Box 836, Noosa Heads, QLD 4567
Address:
Contact Officer Telephone: __ [insert details]
Contact Officer Facsimile: [insert details]
Contact Officer Email: [email protected]
HQ Plantations Queensland:
Party Name: [insert]
ABN: ABN [insert]
Street Address: [insert details]
Contact Officer Name: [insert details]
Contact Officer Postal [insert details]
Address:
Contact Officer Telephone: » [insert details]
Contact Officer Facsimile: [insert details]
Contact Officer Email: [insert details]
Page 11
Page 32 of 48Section 33
SPECIAL MEETING AGENDA 13 OCTOBER 2017
Page 33 of 48
SPECIAL MEETING AGENDA 13 OCTOBER 2017
Schedule 2
Terms of Reference
Role
The role of the joint transition committee is to provide a coordinated approach to the transition of the
Yurol and Ringtail State Forest lands to protected tenure and on issues relating to management and
rehabilitation of the Land for environmental outcomes.
Responsibilities
The key responsibilities of the committee are as follows:
° Work collaboratively to achieve the project outcomes:
e Ensure project management processes are put in place to achieve agreed Project timelines.
° Assess and report on progress including an annual joint report torespective Directors-General
and Chief Executive Officers of the relevant parties.
. Monitor risks and assist in resolving any issue that has implications for the Project.
e Identify opportunities and use best endeavours to facilitate early access to plantation areas
post-harvest for land remediation activities.
° Convene working groups as necessary to provide specialist input.
Membership
The joint transition committee membership will include one (1),.member and one (1) proxy member
from:
° Council
° Department of Environment & Heritage
° Department of NationalhParks, Sport & Racing
° Department of Agriculture & Fisheries
° HQP
° NPA
Meetings
Meetings shall be convened by the Council committee member.
The Committee will nominate a chairperson.
Meetings will be held a minimum of 6 monthly in the first two years after the signing of this MOU and
a minimum of annually thereafter.
Council will provide secretariat services to the joint transition committee and ensure appropriate
meeting records are maintained and provided to all parties.
Page 12
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SPECIAL MEETING AGENDA 13 OCTOBER 2017
Page 34 of 48
SPECIAL MEETING AGENDA 13 OCTOBER 2017
Plan
(To be attached)
Page 13
Page 34 of 48Section 35
SPECIAL MEETING AGENDA 13 OCTOBER 2017
Page 35 of 48
SPECIAL MEETING AGENDA 13 OCTOBER 2017
EXECUTED AS A MEMORANDUM OF UNDERSTANDING
Signed for and on behalf of the State of
Queensland acting through the Department of
Environment and Heritage Protection ABN 46 Signature
640 294 485 by
Date:
(name and position)
a person duly authorised to act in that behalf in the
presence of:
Signature of Witness
Name of Witness in full
Signed for and on .behalf of the State of
Queensland through the Department of
Agriculture and Fisheries. ABN 66 934 348 189 .
Signature
by
Date:
(name and position)
a person duly authorised to act in that behalf in the
presence of:
Signature of Witness
Name of Witness in full
Page 14
Page 35 of 48Section 36
SPECIAL MEETING AGENDA 13 OCTOBER 2017
Page 36 of 48
SPECIAL MEETING AGENDA 13 OCTOBER 2017
Signed for and on behalf of the State of
Queensland through the Department of National
Parks, Sport and Racing ABN 11 322 391 452 by Signature
=o? 7-—alnO0—aoawnmmmmEOM Date:
(name and position)
a person duly authorised to act in that behalf in the
presence of:
Signature of Witness
Name of Witness in full
Signed for and on behalf of the Noosa Shire
Council ABN 97 969 214 121 by
Signature
(name and position) Date:
a person duly authorised,to act in that behalf in the
presence of:
Signature of, Witness
Name of Witness in full
Page 15
Page 36 of 48Section 37
SPECIAL MEETING AGENDA 13 OCTOBER 2017
Page 37 of 48
SPECIAL MEETING AGENDA 13 OCTOBER 2017
Signed for and on behalf of the Noosa Parks
Association ABN 18 870 049 909 by
Signature
(name and position) Date:
a person duly authorised to act in that behalf in the
presence of:
Signature of Witness
Name of Witness in full
Signed for and on behalf of HQ Plantations
Queensland ABN XXXXX
Signature
(name and position) Date:
a person duly authorised to act in that behalf in, the
presence of:
Signature of Witness
Name of Witness in full
Page 16
Page 37 of 48Section 38
SPECIAL MEETING AGENDA 13 OCTOBER 2017
Page 38 of 48
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5 ae ae Z =Section 39
SPECIAL MEETING AGENDA 13 OCTOBER 2017
Page 39 of 48
SPECIAL MEETING AGENDA 13 OCTOBER 2017
Yurol State Forest - summary of values
Yurol State Forest currently contains many significant natural values (Fig. 3). Endangered or Of
Concer regional ecosystems make up most of the remnant vegetation in this state forest (342 of 610
hectares), and 4 Endangered or Of Concern Regional Ecosystems are represented.
Seventeen threatened species, including the koala, have been recorded in or near Yurol State Forest,
and five of these species are endemic to the South East Queensland Bioregion. Large areas of koala
habitat are present.
The aquatic habitat values of this state forest are also highly significant, with 100% of the area
supporting High or Very High Riverine wetland values. Six Mile Creek is a special feature of
conservation significance.
Parts of the area function as biodiversity corridors of regional and State significance.
Threatened ‘Species & Corridors er .
— 17 threatened species
Endangered or Of Concern Regional Ecosystems make up 56 % of the remnant vegetation of this SF, 5 of these threatened species are endemic to the South
4 Endangered or Of Concern Regional Ecosystems are represented (see diagram below). ‘East Queensland Bioregion
TT Large ereas of koala habitat are present.
‘Parts of the area function as biodiversity corridors of
Rainforest “regional and State significance.
Hoop pine vine forest (iethhdinideeii i II ———
12.9-10.16{0C) REapeeee
Eucatypts with non-rainforest Tall open forest
a , / understory Flooded gum with rainforest understory
ae Re ee a 12.9-10.1 (OC) In fom 12.3.2 (0c)
or i] J : ‘, a use “
Sols Oye get, ones POD . id fl Gallery rainforest Miles eA D9
Seawe Bee 12 Saree Up ‘s,) SS
ee ete AV Spe ere ee \ IW! : WY)
NY An ae Ss ps z Su Po re f eNO: RS Ea = i i By
SMa wae WS t Veeereia |o TY” UE SRO e eli2r") || oral Gas
ae VAT mw. \y ? 0 Po hehe eH! ee Og NG & =f Li. BS heat ie
Dae Be SSS Ky Y Pe |) Wine. NWT TT Goliad Eee )
fete ; a ‘haghe! >) Te Li iB es a 49
Re Pf 2 wig aw. | ‘i =f f) hi r) _ | | 4 AK ; ‘yl , g i Tf ‘
me, By o 17) a
Six Mile Creek - Flows into Mary River iS — _—
Provides important habitat for Mary River Cod (deep pots with in-stream =
woody debris, and canopy closure for shade and reduced noise}. " SO
Also habitat for the giant barred frog, tusked frog, Australian lungfish and as Aquatic habitats
kana theavini: —_ > >) 100% ofthe area of this State Forest
— ae a supports High or Very High Riverine
ee cep eee wetland values.
ee Six Mile Creek is a special feature of
ae conservation significance.
Figure 3. A summary of the existing natural values of Yurol State Forest. E = Endangered, OC = Of
Concer, SF = State Forest. Note that the arrangement of regional ecosystems in this diagram is not
intended to reflect their relative extent, or position in the landscape.
Page 39 of 48Section 40
SPECIAL MEETING AGENDA 13 OCTOBER 2017
Page 40 of 48
SPECIAL MEETING AGENDA 13 OCTOBER 2017
Threatened species
The properties contain 1386 ha of habitat for Threatened Species and Iconic Species, under Matters
of State Environmental Significance (Fig. 4). A total of 25 threatened species and three near-
threatened species have been recorded in or near Ringtail and Yurol State Forests (Table 1).
These include three mammal species, including the koala, three species of bird, four species of frog,
and the Richmond Birdwing Butterfly. The properties also contain core habitat for Litoria freycineti
(wallum rocketfrog, Vulnerable), Critinia tinnula (wallum froglet, Vulnerable) and Koala (more
information below).
Yurol, and part of Ringtail State Forest, are situated in the Mary River Catchment, and their forested
subcatchments protect the water quality of this river system. The Mary River Cod and the Australian
lungfish have both been recorded in or near Ringtail and Yurol State Forests.
Locally endemic species
Ten of the threatened or near threatened species recorded in or near these state forests are endemic
to the South East Queensland Bioregion. Three of these endemic threatened species only occur in
the Noosa Shire Council area. Therefore, the preservation of Ringtail and Yurol State Forests as
National Park would make a major contribution to the conservation of species that occur nowhere else
in Australia, or the world.
Page 40 of 48Section 41
SPECIAL MEETING AGENDA 13 OCTOBER 2017
Page 41 of 48
SPECIAL MEETING AGENDA 13 OCTOBER 2017
PROJECT RISK REGISTER: YUROL AND RINGTAIL FOREST PROPOSAL pate oF REVIEW: 5 OCTOBER 2017 —_ <>
|Description of Risk and impact on project | Risk movement Expected timeline
|(movement in or future
risk rating from treatment’ or next
Political will at the State Government level [Project Risk that f project momentum is not maintained Election issues may arse impact State No change Sep-17 |Continue to progress all aspects of the project in Nov-17| Council / CEO
Risk of an election announcement would move |deliverables Govemment's ability and willingness to proceed. Also, significant delay may also reduce will of ‘Council's control / responsibilities to ensure
government into caretaker mode and HQP. Council is ready to proceed as soon as possible.
subsequent government may not wish to
proceed with project. Currently, State Government and HOP remain committed to the project. Councd has raised issue The signing of a formal MOU provides some
with current State Member of Parliament (who is part of the current opposition government) and security for the project (whilst acknowledging it is
obtained informal support for the project should the government change prior to MOU and legal not legally binding).
agreement signoffs.
|The sooner parties can sign off an MOU and make
In any event, the commencement of caretaker mode of the current govt and a change in media releases the more difficult it will be from a
‘Government will no doubt delay progress of the project. political perspective for any Govt to stop the
project
Financial risks associated with reliance on Risks associated with this component of the agreement have been identified and included in Possible No change Sep-17 |Confirmation from NPA that its members are Nov-17| Project Group
NPA for future funding financial modelling scenarios. Financial analysis of NPA financial statements have been formally on-board with the project would provide
Inherent risks with entering into agreement with undertaken, which indicate contributions beyond the initial $500K are not assured. lsome comfort that the organisation is committed to
NFP organisation that is high value and extends ithe long term nature of this project. which will
lover multiple financial years. Formal draft funding agreement has been drafted by Council's Lawyers for assessment. Despite utilise a significant portion of its finances.
this, Council must be aware that when signing off this project that financial contributions of NPA
beyond the initial $500K to the State are not certain and options for Council to enforce funding
agreement are limited.
Failure to address Native Title implications | Project Legal advice has confirmed that Native Title is not extinguished over the project area. Sep-17 |Future discussions with Indigenous Groups and Ongoing] Project Group
and other future land use matters including |deliverables Accordingly, it is consider that the area will form part of regional Indigenous Land Use Agreement State Departments required to determine desired and Transition
failure to identify opportunities to promote negotiations. These are not considered to be high impact on the area. use for the site once protected. E.g. Mountain Committee
responsible community use of the area Biking, Indigenous Food trails etc.
Failure to identify and promote opportunities for
responsible Community Use of the project area PEO to liaise with National Parks re future
reduce value to the Community of the project recreational use particularly in relation to Noosa
Trail network and Noosa Bird Trail.
Draft management plan for site will need to be
developed and should involve community
[consultation etc. and link with Council's Sport and
Recreation Plan.
Risk of cost shifting from State Government |Financial / From negotiations undertaken between State, Counc”, NPA and HOP it is confirmed that but for Possible Decrease Sep-17 |Education to the community via media release etc. Ongoing] Project Group
to Council or perceptions of cost shifting - |Reputational the financial contribution of Council and NPA for the project the project would not proceed. if formal signoff is obtain to proceed should be
|Given that the ultimate aim of the project is for undertaken to counter any negative perceptions.
project land to be transferred to National Park The project accelerates the protection of the land, which otherwise may not be protected fora
there is a risk of the perception that Council via significant amount of time.
taking on the responsibility for rehabilitation is
cost shifting by the State Government to
‘support its National Park Strategy.
Physical Environmental Risks impacting on Risk of bushfires, drought, pest etc. could impact significantly on Council's Rehab timeline and Decrease Sep-17 |Ensure fire trails are maintained throughout life of Ongoing] Environmental
(Council's Rehab effectiveness. Limited controls available to reduce this risk however, it should be noted for ithe project and rehab is monitored closely to Services/ Parks
Risk of environmental factors on rehab completeness. Considered that Council's active rehab obligations end at 5 years after becoming maximise environmental benefits. and Natural
component timelines. trustee. Also considered that such events are part of the natural cycle and difficult to avoid. Areas.
Desired Koala Outcomes associated with the |Environmental / | |nitial investigation indicate that project area is in the regional Koala corridor and interest on funds Possible Sep-17 |It is considered important that Koala research Ongoing] Principal
Project are not achieved Reputational held in trust for 5 years will be utilised for Koala projects in the area. projects are commenced early in the project so Environment
Given the Koala focus of this project there is a that benefits can be realised as soon as possible. Officer /
high reputational risk for project parties if Transition
Koala's are not benefited by the rehab and Noted that the State has proposed to utilise Committee
protection of the land. interest eared on partner funds held in trust to be
used only for Koala related grant projects in the
Noosa area.
Education component with respect to management
community expectations is also important. Note
that the environmental benefits of the project go
beyond Koalas.
Page 41 of 48Section 42
SPECIAL MEETING AGENDA 13 OCTOBER 2017
Page 42 of 48
Description of Risk and impact on project ‘Main Consequence} Risk movement Expected timeline
‘Category (movement in for future
sk rating from |treatment/ or next
7 |Internal Resources Required to manage Financial itis anticipated that unplanned management events will occur such as indiscriminate access, Possible Sep-17|Ongoing monitoring once tenure transitions. Ongoing | Project Group
addition Conservation Park by Council are |camping, bushfire and rubbish disposal which will all place additional responsibilities on
underestimated environment services/natural areas staff. However, impact on Environmental Team and Parks and|
Failing to accurately identify impact of Natural Areas have been included in Council's costs estimates peer reviewed by LandCare and
managing the project area on the Environment included in financial modelling. Local laws have confirmed limited impact on resources as a
and Parks and Natural Areas teams could put result of expanding area of responsibility to include the additional area within responsibility.
pressure on current capacity, which may lead to
request for further resources.
Council and NPA reputational risks Political nous and management from CEO and Council regarding managing community Possible Sep-17|Appropniate media statements pending project Nov-17
Political / Reputational Risk associated with expectations and setting up clear boundaries regarding extent of project parties responsibilities proceeding.
Noosa Council being part of a significant multi and relationship of transactions.
party agreement with Noosa Parks Association,
which involves significant long term Formal MOU and subsequent agreements will be transparent and available for publication.
commitment.
Confidentiality / Media Attention It was agreed at meeting at DEHP on 9 June 2017 that no parties would contact the media until Possible Jun-17 | Project Parties and State Government to prepare Sep-17 |CEO/ Council!
Given the large number of parties involved further notice. State Goverment would coordinate a draft media release in due course to be media release in due course in accordance with Officers involved
(some with Commercial Interests) and the large signed off by all project parties before release. agreed MOU and agreement in the project
number of people/stakeholders who this project
could impact on it is important that media is not Initial Council approval meeting is being held confidentially.
informed about the project until such time that
parties are in some sort of an agreement to
proceed further. Failing to do so could impact
‘on the relationship! cooperation of various
Failure to identify opportunities to reduce Financial / Council Project team and Transition Committee must explore opportunities to reduce costs further. Possible Decrease Sep-17 | Opportunities to reduce costs must continued to be Ongoing |Project Group
rehab costs and maximise value of the Reputational explored throughout the project. Further research
project Council must ensure that opportunities to reduce rehab costs are explored well in advance of re Carbon offset opportunities, third party not for
Risk of not identifying/exploring opportunities to jcommence formal rehabilitation e.g. environmental grants, good Corporate Citizen projects etc. profit assistance e.g. land care, green army etc.,
reduce rehab costs to Council through the life of Koala sanctuaries.
the project leads to negative financial Initial investigations have been undertaken with respect to potential carbon and environmental
consequences. offset opportunities for the project. Future federal funding opportunities may be
available such as under 20 Million Trees program.
Inadequate Concept selection Financial / Confirmation that project aligns with Council's Corporate Plan Theme - The Noosa Environment -" Decrease Sep-17 | Once project details have been finalised and Nov-17 |Project Group
Risk that initial pre-feasibility and feasibility Reputational Our Environment is protected, enhanced and valued by our Community" “The Noosa Natural approved by Council and project parties have
stages of the project were not adequately Environment is protected and enhanced". finalised MOU, announcements can be made to
investigated, which may lead to the organisation Extensive h has been undertaken by a number of proj ies to ensure that Proj the public highlight the environmental significance
becoming bound to a long term project that may - - ~ Project F ~ - ro} Park and value of this project in accordance with agreed
not be aligned to end produce desired concept aligns with desired outcomes - permanent protection of the project area into National 5 Js.
outcomes. (risk include, financial, reputational) for Community benefit. Investigations include: _ a
1. Recommendations from the DEHP regarding the natural values and existing uses of Ringtail
and Yurol State Forests.
2. Preliminary guidelines developed by DEHP for restoring plantation areas of Yurol and Ringtail
State Forests.
3. Environmental Reports from DEHP of project area confirming the environmental value of the
project area if protected.
4. intemal Council analysis by Environmental Officers and Parks and Natural Areas Coordinator
also confirm the environmental value and significance of the project.
5. Environment Levy Working Group have confirmed the environmental merits of the project.
|The above investigations confirm that the project from an environmental perspective would align
ito the objectives of the Environment Levy Policy and Council's Environmental Strategic Values.
Project of regional significance - linking the National Park Corridor. In terms of financial,
environmental and community value - the vast size of the project area that would be protected as.
part of the project is much greater than recent acquisitions under the environment levy of Johns’
landing (40Ha) $2.2M and Franz Land (80ha) $2.7M. Project area - PLA 1,482 HA and State
Forest 1, 100HA to transition to National Park. End game is that project area is permanently
protected under National Park. Total cost to be divided between State, Council and NPA to pay
HOP to walk away from all plantations in the area within 5 years is $3.5M. Cost comparisons of
this project with previous per HA acquisitions under the Environment levy indicate this project
provides great value for use of the environment levy in terms of the amount of land permanently
protected against costs. But for this project, 2409Ha of land with regional National Park
connectivity would remain exposed to future logging for a significant amount of time.
Page 42 of 48Section 43
SPECIAL MEETING AGENDA 13 OCTOBER 2017
Page 43 of 48
SPECIAL MEETING AGENDA 13 OCTOBER 2017
No. |Category rating | (movement in previous for future
risk rating from |review treatment! or next
[previous review) review
12 |Project fails to meet community expectations | Reputational Preliminary project briefings have been presented to environmental levy working group, LT and Unlikely Decrease Sep-17| Education component regarding rehab and Dec-17|Principal
- As this is a new project concept in respect of Council. Council has included ‘Pursue potential Yurol and Ringtail Forest Environmental Project’ in management plan for the area will need to be Environment
use of Environment Levy Funding there is the the 17/18 Operational Plan. developed in due course should project proceed. Officer.
possibility that project outcomes will not meet
community expectations. It is noted that project aligns with Council's sustainability principles, particularly in terms of
environmental opportunities. Acknowledge that the Noosa Community is in favour of
environmental protection of the Region given its environmental, community and economic
benefits.
Tenure pathways and certainty for project Financial / Legal advice has been obtained from both Council's Lawyers and Crown Law, which have Unlikely Decrease Sep-17| Formally signing of MOU by parties and Nov-17|CEO/Principal
Parties cannot be obtained Project confirmed transactional documents can be drafted that are enforceable and will protect various subsequent binding Legal agreement (including Environment
Failure to obtain binding and enforceable Deliverables Parties interests. At the end of the day, if Council's tenure requirements are not by the sunset NPA funding agreement) needs to be approved Officer/Governa
agreement, which suits all parties interest could date, which is set at 7 years, contribution funds will be returned to Council. and signed off before funds are transferred. ince Advisor
result in significant financial loss and
reputational damage. Whilst funds would be returned to Council, significant resources invested in the project in terms of
staff etc. would not be recouped.
Financial modelling for rehabilitation Project Principal Environment Officer and other Team members have undertaken investigations in Possible Decrease Sep-17| There is reasonable assurance based on Council's Nov-17|Principal
itis critical that data provided to inform financial |deliverables/ —_| respect of future environmental rehabilitation for the site based on site inspections, comparable Due Diligence, LandCare Peer Review and Environment
modelling is accurate and research based. Finance / national examples, liaising with relevant experts and State Departments. DEHP studies can be information from State that rehab estimates are Officer.
Failing to have accurate data may result in Reputational used to inform estimates. reliable.
significant financial costs and reputational
damage to Council. Council has engaged Landcare to conduct a peer review of the Principal Environment Officer's Additional control will be to ensure that formal legal
rehab assessments to provide assurance on estimated rehab funding contributions put forward by agreement caps Council's rehab requirements at 5
Council. years.
Obligations have also been included in the draft MOU that Council's active rehab obligations and
responsibilities cease at 5 years as Trustee of Conservation Park.
Completed by - Project Group, October 2017
Pit eed) ee
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SPECIAL MEETING AGENDA 13 OCTOBER 2017
ATTACHMENT 5
Financial Analysis Assumptions
Page 44 of 48
Section 45
SPECIAL MEETING AGENDA 13 OCTOBER 2017
ATTACHMENT 6
Scenario Detailed Cashflows
Page 45 of 48
SPECIAL MEETING AGENDA 13 OCTOBER 2017
ATTACHMENT 6
Scenario Detailed Cashflows
CASHFLOW 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027
Basecase (Natural Regeneration) $1,863,334 -$127,500 -$130,050 -$132,651 -$135,304 $1,610,090 $112,729 $114,983 $117,283 $119,629
Council Investment $1,863,334
NPA Repayments -$127,500 -$130,050 -$132,651 -$135,304 -$184,632
Natural Regeneration $792,864
Assisted Regeneration $891,340
Reconstruction
Infrastructure Costs $43,722 $44,596 $45,488 $46,398 $47,326
Operational Costs $66,797 $68,133 $69,495 $70,885 $72,303
Assisted Regeneration $1,863,334 -$127,500 -$130,050 -$132,651 -$135,304 $1,930,419 $112,729 $114,983 $117,283 $119,629
Council Investment $1,863,334
NPA Repayments -$127,500 -$130,050 -$132,651 -$135,304 -$184,632
Natural Regeneration $687,149
Assisted Regeneration $1,140,915
Reconstruction $176,469
Infrastructure Costs $43,722 $44,596 $45,488 $46,398 $47,326
Operational Costs $66,797 $68,133 $69,495 $70,885 $72,303
Reconstruction $1,863,334 -$127,500 -$130,050 -$132,651 -$135,304 $3,472,118 $112,729 $114,983 $117,283 $119,629
Council Investment $1,863,334
NPA Repayments -$127,500 -$130,050 -$132,651 -$135,304 -$184,632
Natural Regeneration $105,715
Assisted Regeneration $2,852,288
Reconstruction $588,229
Infrastructure Costs $43,722 $44,596 $45,488 $46,398 $47,326
Operational Costs $66,797 $68,133 $69,495 $70,885 $72,303
Page 45 of 48Section 46
SPECIAL MEETING AGENDA 13 OCTOBER 2017
2 1617T130 PEREGIAN BEACH DIGITAL HUB - TENDER ASSESSMENT
DOCUMENT INFORM AT ION
Author Director Community Services, Alan (Fox) Rogers
Community Services Department
Index ECM/ Subject/ Economic Development & Project/ Digital Hub
Attachments Nil.
EXECUTIVE SUMMARY
Not applicable.
RECOMMENDATION
That Council note the report by the Director Community Services to the Special Council meeting
dated 13 October, 2017 and;
A. Not award tender 1617T130 in accordance with Section 228 (8) of the Local Government
Regulation 2012 and Conditions of Tender clause 14.1; and
B. Request the Chief Executive Officer to inform all tenderers of Council’s decision.
Background
The development of the Peregian Beach Digital Hub (the Digital Hub) as a location for innovation,
entrepreneurial activity and IT business development is one of the major components of Stage 1
of the Rufous Street Masterplan. Construction of the Digital Hub, which has been jointly funded by
Council and the State Government, is now well underway with an estimated completion date of the
first quarter 2017.
The Digital Hub is the major economic initiative identified within the Rufous Street Masterplan.
Specifically, the main building of the Digital Hub will provide:
Over 600m2 of commercial space;
Co-working areas;
A range of office spaces;
Presentation, training and education rooms;
A café and public amenities;
High speed data connection;
Over 40 car parking spaces adjacent to the building; and
Supportive infrastructure and location – on site car parking.
Tender 1617T130
This report relates to the tender for the provision of management services for the Digital Hub.
On 18 September 2017, a report was presented to the General Committee detailing the tender
process, assessment outcomes, potential financial impact, risks and proposed next steps.
Page 46 of 48
Section 47
SPECIAL MEETING AGENDA 13 OCTOBER 2017
At its Ordinary meeting on 21 September 2017, Council resolved to:
Note the report by the Economic Development Manager to the General Committee Meeting dated
18 September 2017 regarding tender 1617T130 for the provision of Management Services –
Peregian Beach Digital Hub: and:
A. Notify tender submitters that a decision on tender 1617T130 is on hold while Noosa Council
further considers the business case of the Peregian Digital Hub project; and
B. Request the CEO to arrange for advice to be provided to Council on strategies to meet
Council’s broad intentions for the Peregian Digital Hub.
Following this decision and discussions with Councillors at a workshop on the 22 September 2017,
staff sought independent legal advice with regard to the tender process undertaken to date. Based
on this advice from King and Co Solicitors, the lack of any return on its investment and the different
management and financial models proposed by the tenderers, it is recommended that Council not
award tender 1617T130 and cease the [current] tender process. Section 228 (8) of the Local
Government Regulation 2012 and Conditions of Tender clause 14.1 allows Council to take this
approach.
Ceasing the tender process at this point will also enable Council to consider the business case and
to clarify and confirm its intentions for the Digital Hub.
Next Steps
Pending Council approval of the recommendation included in this report, the suggested next steps
are to:
1. Notify all Tenderers of the decision;
2. Further consider the business case and management models to meet Council’s intentions
for the Digital Hub; and
3. Communicate with all interested parties these next steps.
Previous Council Consideration
Ordinary Meeting Minutes, 21 September 2017, Item 7, Page 18
That Council note the report by the Economic Development Manager to the General Committee
Meeting dated 18 September 2017 regarding tender 1617T130 for the provision of Management
Services – Peregian Beach Digital Hub; and
A. Notify tender submitters that a decision on tender 1617T130 is on hold while Noosa Council
further considers the business case of the Peregian Digital Hub project; and
B. Request the CEO to arrange for advice to be provided to Council on strategies to meet
Council’s broad intentions for the Peregian Digital Hub.
Finance & Risk
Finance
The recent tender process tested the market and Council’s business case for the management of
the Digital Hub, with the outcomes of the tender responses indicating a different financial outcome
than originally anticipated by Council. Given this outcome, it is considered prudent and practical
for Council to not award this tender and further consider the business case and strategies to more
closely align to Council’s intentions for the Hub.
Page 47 of 48
Section 48
SPECIAL MEETING AGENDA 13 OCTOBER 2017
Risk
The construction of the Digital Hub is due for completion in the first quarter of 2018. Should Council
decide not to award the tender for management services at this time, there is potential that the
building may be completed prior to management arrangements being finalised and implemented.
Consultation
External Consultation - Community & Stakeholder
External independent legal advice was sought from King and Co Solicitors regarding the tender
process and Council’s options to progress this tender.
Council can resolve to not award this tender under Local Government Regulation 2012 S.228 (8)
– “A local government may decide not to accept any tenders it receives” and Conditions of Tender
clause 14.1 – “The Principal will not be bound to accept the lowest or any Tender”.
Internal Consultation
Director Corporate Service
Director Environment and Sustainable Development
Economic Development Manager
Procurement and Fleet Manager
Departments/Sections Consulted:
Chief Executive Officer x Community Services x Corporate Services
Executive Officer Community Development Financial Services
Executive Support Community Facilities ICT
Libraries & Galleries Procurement & Fleet
Local Laws Property
Waste & Environmental Health Revenue Services
Executive Services x Environment & Sustainable Development Infrastructure Services
Community Engagement Building & Plumbing Services Asset Management
Customer Service Development Assessment Buildings and Facilities
Governance x Economic Development Civil Operations
People and Culture Environmental Services Disaster Management
Strategic Land Use Planning Infrastructure Planning,
Design and Delivery
Page 48 of 48