2022-10-11 Services & Organisation Committee Agenda

SERVICES & ORGANISATION COMMITTEE MEETING AGENDA                            11 OCTOBER 2022


Previous Council Consideration
Ordinary Meeting, 17 March 2022, Item 3, Page 13
That Council note the report by the Property Advisor to the General Committee Meeting dated
14 March 2022 and agree to proceed to the tender process for a new ferry service to commence
in July 2024, based on the fully outsourced operating model identified as Option 2 and the
recommended tender approach outlined in the report.
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 ferry service has historically provided returns that contribute to Council’s general revenue.
The fee structures applied by Council have ensured the service has never needed general rate
ratepayer subsidisation, with a return achieved broadly in line with the principles of full cost
pricing and Council’s Financial Sustainability Policy.
In response to the tender outcome, fee increases may be required to ensure the services
continues to avoid ratepayer subsidisation. Staff intend to proceed to a review of the ferry fees
and provide recommendations back to Council.
Risks & Opportunities
The report seeks a timely Council determination in the lead up to the expiry to the current ferry
lease agreement, with most of the ensuing months required by the successful contractor to
complete design, procurement and manufacture of vessels, and to transitioning in its new
service. There would be significant risks in the event of delays to executing a new agreement
or the need to proceed to an alternate procurement process.
The proposed contract term of 20 years reflects the significant capital investment for vessels
required by the new contractor. To address risk associated with this term, the draft service
agreement prepared for the tender incorporates provisions to vary the contract by mutual
agreement in future should there be a need to address differing demand, service levels,
emerging trends or the like. The agreement also incorporates the contractor’s Service Plan,
which outlines its commitment to adapt and respond to changing customer needs and
technologies through the term of the agreement.

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