2022-03-14 General Committee Meeting Agenda

GENERAL COMMITTEE MEETING AGENDA                                                   14 MARCH 2022


Given the importance of the contract, staff intend to engage an independent probity advisor to
support and monitor the tender process.
Previous Council Consideration
Ordinary Meeting, 19 August April 2021, Item 6, Page 17
That Council note the report by the Manager Property to the Services & Organisation Committee
Meeting dated 10 August 2021 regarding the Noosa North Shore Ferry lease and:
A.    Agree to award the remaining 2-year lease extension to Noosa North Shore Ferries Pty Ltd;
      and
B.    Agree to consider a further report at Council’s February 2022 round of Council meetings
      regarding proposed ferry service operating models, contractual arrangements and tender
      process for the purpose of proceeding to procure a new ferry service operation commencing
      1 July 2024.
Ordinary Meeting, 18 April 2019, Item 4, Page 11
That Council note the report by the Property Advisor to the Services & Organisation Committee
Meeting dated 9 April 2019 and:
A.    Note the operator’s request for a 5-year extension to the existing ferry lease;
B.    Subject to obtaining the operator’s agreement, agree to only extend the lease for 3 years
      from 1 July 2019 to 30 June 2022 at this time, with the remaining balance 2 year extension
      period to be further considered prior to the lease expiry to allow Council to investigate
      opportunities for digital technology introduction; and
C.    Request staff further investigate opportunities for a simplified concession system, as outlined
      in the report.
Finance
The existing ferry lease agreement with NNSF operates on a revenue share basis and is current
until 30 June 2024. The current service agreement provides a return which contributes to Council’s
general revenue. The service arrangement and fee structures applied by Council has ensured the
ferry service has historically never needed ratepayer subsidisation, with the return achieved
offsetting general rate revenue requirements to support Council in meeting its financial
sustainability targets.
AEC’s financial analysis across a range of modelled scenarios suggests an ongoing ability to
maintain the revenue-positive outcome for the service. Though, given the desired service
improvements sought, such as electronic payment options and queue management, there is
potential for increased contractor costs that would erode current revenue levels. Revenue and
crossing fee implications will be considered as part of the tender assessment process and will be
reported to Council.
Risks & Opportunities
The report seeks a timely Council determination in the lead up to the expiry to the current ferry
lease agreement. The timeline detailed in Section 3 above seeks to allow sufficient time for a
successful tenderer to procure new vessels if required (18 months). There would be risks in the
event of a lapsed agreement or the need to proceed to an alternate procurement process.
The recommended tender process seeks to leverage the expertise of an identified field of potential
tenderers to obtain competitive market responses from experienced operators.
Council is a member of the Teewah Cooloola Working Group, which has sought to address the
issue of sustainable use levels for the area. Potential for future permit limits on Noosa North Shore
visitors are noted in the QPWS feedback above. Under the current lease agreement, such revenue
impacts are predominantly borne by Council. Similarly, the proposed fixed fee component to be
tendered for the new service would be intended to provide financial surety to the contractor.

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