2020-07-16 Ordinary Meeting Agenda

ORDINARY MEETING AGENDA                                                                                                        16 JULY 2020


Financial Considerations
The impacts of the COVID-19 pandemic on Council’s finances has required Council to make many
difficult decisions about priorities and spending, including the competing importance of new projects.
The 2020/21 adopted budget includes an operating deficit for the first time in many years, and careful
management will be required over the next 2 years to return to the budget to surplus.
Staff have also commissioned updated building condition assessments and an economic feasibility
assessment which indicate the purchase of the site would involve capital expenditure comprising
estimated upfront building repairs of $1 million and forecast building renewals to 2030 of
approximately $7 million. Expected market rents that could be achieved by leasing the site of would
be overwhelmingly offset by annual depreciation and maintenance costs, requiring a general rate
increase of between 1.5% and 2% to ensure Council’s bottom line was not impacted.
Clearly these capital cash outflows and expenses go well beyond what could be considered a minor
or low-risk project and would add an unnecessary burden to ratepayers already financially
challenged in the current environment.
In regard to purchase price, it is important to note that the cost of purchase for the site is only a minor
component of the whole-of-life cost of owning the facility. Even if the site was gifted to Council a
general rate increase would still be required.
Conclusion
Community interest in the former Tewantin TAFE site has been driven by a desire to see this
important community asset reactivated and reused. That desire is shared by Member for Noosa,
Sandy Bolton who has expended considerable effort to date to realise these aims. Council is very
appreciative of all of the hard work and dedication by the Member for Noosa in pursuing this issue
on behalf of Council and the Noosa community.
Council has acted in good faith in continuing to negotiate to purchase the site from the State but,
unfortunately, negotiations have become increasingly protracted and complex, with timeframes and
outcomes still uncertain.
Previous Council’s interest in purchasing the site was driven by Council’s desire to protect the
environmental values of the site from private purchase and development and also delivering on the
community’s desire to see the site reused and reactivated. Given the environmental values of the
site are now protected there is now no longer a compelling need to proceed with the purchase to
safeguard the site’s future. The argument for not purchasing the site has recently become more
persuasive given Council’s finances have been severely impacted by the COVID-19 pandemic, with
those impacts now likely to be felt for a number of years within this community.
Whilst timeframes for sale of the site remain uncertain, there is an opportunity for the State to explore
tangible opportunities to provide a lease direct to a tenant to allow prompt reactivation of the facility.
This appears to be the most expedient course of action to avoid further delays. Interest has been
expressed by a number of education and training organisations and such uses still appear to be the
best fit for the buildings.
The interests of the Noosa community are now best served by Council formally withdrawing from
purchase negotiations and advocating for and assisting the State to activate the site via a suitable
end user. We must as we have said, save where we can to spend where we must. Sometimes the
best deals you make are the ones you never enter into. In this instance, it would be prudent to
suggest that was in fact the case.


                                                                             16 July 2020
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Cr Clare Stewart                                                              Date



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