Agenda of Meeting of the Port Phillip City Council

Meeting of the Port Phillip City Council

17 April 2024

10.1	592-598 City Road, South Melbourne - Planning Scheme Amendment C217port
location/address:	592-598 City Road, South Melbourne
Executive Member:	Brian Tee, General Manager, City Growth and Development
PREPARED BY:	Brad Foletta, Principal Planner Fishermans Bend

1. PURPOSE

1.1 To provide a Council position on a request for a Planning Scheme Amendment, C217port, made to the Minister for Planning for land at 592-598 City Road, South Melbourne, which proposes to apply a Specific Controls Overlay that would facilitate the demolition of the existing building and construction of a six-storey building for use as a residential hotel and café.

2. EXECUTIVE SUMMARY

Ward:	Gateway – Montague Precinct
Trigger for determination BY COUNCIL:	To decide on a Planning Scheme Amendment matter
ApplicATION NO:	DTP Ref: Planning Scheme Amendment C217port CoPP Ref: PDMR/00001/2024
Applicant:	City Road Properties Pty Ltd
Existing use:	Two level commercial building
Abutting uses:	Mixed use comprising new retail, office and dwellings and more traditional industrial land uses
Zoning:	Capital City Zone (CCZ1) Abuts Transport Road Zone 2 (TRZ2) (City Road)
Overlays:	Design and Development Overlay (DDO30) Special Building Overlay (SBO2) Environmental Audit Overlay (EAO) Parking Overlay (PO1) Infrastructure Contributions Plan Overlay (ICO1)

Application Matters / Background

2.1 An application has been made to the Minister for Planning to exercise powers under Section 20(4) of the Planning and Environment Act 1987, in respect of Planning Scheme Amendment C217port (Amendment).

2.2 The Amendment proposes to apply the Specific Control Overlay (SCO) and introduce an Incorporated Document that would facilitate the demolition of the existing building on the land and construction of a six-storey building, for use as accommodation (residential hotel) and retail premises (café).

2.3 The application site is located in the Montague Precinct of the Fishermans Bend Urban Renewal Area (FBURA). Under the existing provisions of the Port Phillip Planning Scheme (Scheme), a planning permit cannot be granted for the use of land or buildings and works due to the restrictions imposed by the Infrastructure Contributions Overlay which requires an Infrastructure Contributions Plan to be approved or an alternative infrastructure contributions mechanism implemented in the Scheme. This is currently progressing through a separate Planning Scheme Amendment process but is not yet implemented.

2.4 In order to facilitate development within the FBURA, the Minister for Planning has considered many site-specific Planning Scheme Amendments where a proposal demonstrates that it responds to local policy, meets the requirements of the Design and Development Overlay, Parking Overland and Capital City Zone, and makes appropriate development contributions.

2.5 The Minister for Planning is the Planning Authority for deciding this application and has sought the views of Council and other Statutory Authorities about the appropriateness of the Amendment.

2.6 The Minister for Planning has established the Fishermans Bend Standing Advisory Committee to advise the Minister for Planning on any unresolved issues between the various parties. This is subject to the attached Terms of Reference.

2.7 On 20 December 2023, the applicant applied to the Minister for Planning to prepare the Amendment. This report considers plans and reports that were referred to Council on 4 January 2024 and as amended on 21 February 2024.

2.8 The subject site is located the outside the Core Area of the Montague precinct of the FBURA. More particularly, the site is in:

· Building Typology Precinct Area M6 (Low-rise) of the Design and Development Overlay (DDO30) which has a preferred precinct character of:

‘Low-rise development that responds to the context and character of the adjacent low-rise neighbourhoods.’

· A mandatory maximum building height of 23 metres (six storeys) pursuant to DDO30.

· A maximum street wall height of four storeys and minimum 10 metre setback above the street wall pursuant to DDO30.

· An active street frontage to City Road of Secondary Type 1 (60% permeability).

2.9 The building complies with the maximum mandatory building height. It is 22.9 metres to the top of the pergola (excluding the lift overrun) and six storeys. A non-habitable architectural feature up to 3 metres high and building services are permissible encroachments above the maximum building height.

2.10 The proposed street wall height is four levels (podium) and complies with requirements, especially given the direct abuttal to a heritage property at 588-590 City Road (HO509). The tower component is proposed to be setback 10 metres to City Road in accordance with DDO30 and built directly on the three other boundaries.

2.11 The proposal has zero setbacks on three of the four interfaces. These facades feature dark metal vertical louvers that extend over five storeys. The structures also encroach over the boundaries of the site onto Council’s laneway. This encroachment is not supported.

2.12 Officers recommended changes to address the above built form concerns including varying the northern and western elevation presentation using a greater mix of materials to break up the building mass, and implementing the Waste Management, Traffic Engineering and Landscape Architect recommendation. Several other design, operational and amenity concerns will be highlighted and recommended to be addressed by conditions.

2.13 Officers initially raised concerns about potential flooding of the ground floor and the applicant lodged an amendment to address the impacts on the site from the Special Building Overlay – Schedule 2 (SBO2) and Melbourne Water’s 1% sea level rise requirements. This has raised the ground floor level with all core habitable areas being a minimum height of 3 metres AHD required to alleviate flooding impacts. Melbourne Water have provided support for this outcome.

2.14 Based on the evaluation of the proposal, it is recommended that the Council resolve to advise it does not support the application in its current form based on the matters set out in the Recommendation below.

3. RECOMMENDATION

Recommendation – part a

3.1 That Council advises the Minister for Planning (C/- the Department of Transport and Planning) that Council does not support the Planning Scheme Amendment in relation to:

· Articulation and extent of Architectural features cantilevering over Council’s laneway.

· Solar access to hotel rooms along the eastern boundary, size and number of light wells.

· The floor-to-floor heights of Levels 1-6 do not achieve the preferred adaptable heights.

· The failure to demonstrate how water runoff from the subject site onto the abutting laneway to the west and north will be managed.

· The tandem configuration of the car parking facilities without the support of Parking Management Plan.

· The reliance on waste collection to be conducted off site from Boundary Street.

· The failure of the loading bay to accommodate access by a Small Rigid Vehicle and meet the requirements of AS2890.2.

· The minimal width of the loading bay and resulting impacts on ability of Small Rigid Vehicle to exit the laneway in a forward direction.

· The loading bay garage door failing to demonstrate the minimum the minimum headroom clearance for a Small Rigid Vehicle of 3.5 metres.

· The motorcycle parking infringing on the loading bay area.

· The utilisation of the no standing zone on City Road for pickup and drop offs without clear signage and consent from the relevant authority.

And for the reasons set out in Sections 9 and 12 of this report.

All other aspects of the proposal including traffic, sustainable design and waste management are acceptable subject to receipt of more detailed information which will likely result in minor changes to the proposal. These design and operational concerns could be addressed by conditions of any Incorporated Document.

Recommendation – part b

3.1.1 That the Council authorises the Manager City Development to instruct Council’s Statutory Planners, planning advocate and/or solicitors on:

· Any future amendments to the application

· Any VCAT application for review for the matter; and/or

· Any independent advisory committee appointed by the Minister for Planning to consider the application.

4. RELEVANT BACKGROUND

4.1 The following relevant applications have previously been considered for the subject site:

Application No.	Proposal	Decision	Date of Decision
907/2009	Use of the land as a medical centre and a reduction in the number of car parking spaces	Permit	20 January 2010
1102/1997	Alteration to façade	Permit	15 October 1997
1306/1995	Illuminates sign	Permit	11 March 1995

5. PROPOSAL

5.1 The application proposes a site-specific Planning Scheme Amendment to facilitate:

· Use the land for Accommodation (Residential Hotel) and Retail premises (Café) in the Capital City Zone - Schedule 1.

· Demolish the existing building on the land in the Capital City Zone – Schedule 1.

· Construct a six-storey building and roof top terrace comprising a four-level podium and a two-storey tower above in the Capital City Zone - Schedule 1, Design and Development Overlay - Schedule 30 and Special Building Overlay - Schedule 2.

5.2 More particularly, the proposal comprises:

Building height:

· Podium: 14.65m and 4 levels

· Tower: 22.9 metres (to top of pergola) and six storeys. Including lift overrun 24.38m.

Podium setbacks:

· City Road: zero metre setback at all levels (1 metre recessed setbacks in parts).

· All other boundaries: Zero metres, including to an unnamed laneway (identified as R2947 on Council’s Road and Laneway Register). The ground floor setback to the western boundary, of 1.4 metres, is required to facilitate an overall accessway width of 6 metres for vehicles.

Tower setbacks:

· City Road: 10 metre setback at Levels 4 and 5.

· All other boundaries: zero metre setback, including to unnamed laneways.

Gross Floor Area:

· Total: 3,722.7 square metres comprising:

- Cafe (Retail):170.3 square metres

- Residential Hotel (Accommodation): 2, 027.8 square metres / 85 hotel rooms

- Terraces and balconies: 379.9 square metres.

- Car park: 205.3 square metres

- Services: 939.4 square metres

Car Parking: 10 spaces (8 in a tandem arrangement and 1 car share space)

Bicycle parking: 20 spaces (10 visitor and 10 staff spaces)

Motorcycle Parking: 5 spaces

Dual lift core

· Two lifts and circulation area.

· Central stairwell/ fire escape.

Ground floor:

· One retail tenancy (café) (GFA: 170.3 square metres). The tenancy will sit at 3 metres AHD and approximately 0.63 metres above the grade of City Road. Pedestrian access will be via by a set of double doors to the street, leading to internal steps, and entrances from the ramp and building lobby.

· The residential hotel lobby area will include two lifts, reception area / office, and communal bathroom (end of trip facilities), accessed via City Road. Fire escape stairs are located behind the lift core in the centre of the building core.

· 10 car spaces, 20 bicycle parking spaces, 5 motorcycle spaces and loading facilities present to the unnamed laneway along the rear portion of the western boundary. Access to and from the parking provision is via the laneway to Boundary Road 30 metres to the west.

· 28,000 litre rainwater tank situated under car park at rear.

Levels 1 to 3 (within podium):

· 19 hotel rooms per floor (including one accessible room) all with ensuites, ranging in size from 20.5 square metres to 36 square metres.

· A central lift core, emergency stairwell, and hallway, including a services cupboard, communications rooms, and two storage rooms for housekeeping.

Level 4 (above podium):

· 13 hotel rooms (including one accessible room) all with ensuites, ranging in size from 20.5 square metres to 31 square metres.

· A central lift core, emergency stairwell, and hallway, including a services cupboard.

· Communal Gym accessed from hotel lift core with a floor area of 48.45 square metres.

· External terrace forming the communal open space for hotel guests, comprised of paved area and lap pool, with a floor area of 168.3 square metres.

Level 5 (above podium):

· 15 hotel rooms (including one accessible room) all with ensuites, ranging in size from 20.5 square metres to 24.7 square metres.

· A central lift core, emergency stairwell, and hallway, including a services cupboard.

Level 6 (Roof top terrace):

· A 164.5 square metres roof top terrace area for hotel guests including barbeque area, and two separate seating areas, one covered with a pergola. The area is oriented towards the northern and western boundaries of the site.

· A central lift core with single lift, emergency stairwell and general roof top services.

Materials and Finishes:

A mixture of white and dark brown shades of rendered concrete finishes, brick tiles in dark grey, jet black metal window frames, vertical metal louvers and reflective glazing as per below materials sample.

Figure 1: Render of the proposed built form façade as viewed from City Road.

Figure 2: Render of the proposed built form as viewed from the south-east (City Road).

Figure 3: A render of the proposed built form as viewed from the west (Boundary Road and laneway).

Documents - Summary

Proposed Plans

Development Plans prepared by prepared by FFA Architecture and referred to as Project No. 2305 Drawing Nos. TP100, TP101, TP102, TP103, TP104, TP105, TP110, TP111, TP120, TP121, TP122, and TP130 Revision A dated 21 February 2024.

Supporting Documents

· Draft Incorporated Document, dated December 2023, prepared by Tract.

· Waste Management Plan, (Version 0), dated 13 December 2023, prepared by Frater Consulting Services.

· Sustainability Management Plan, (Revision 1), dated 12 December 2023, prepared NJM Design.

· Traffic Impact Assessment, (Revision 1), dated 14 December 2023, prepared by TTM.

· Planning Report, dated 20 December 2023, prepared by Tract.

· Preliminary Site Investigation (Environmental Audit Overlay), dated 28 November 2023, prepared by Atma Environmental.

6. SUBJECT SITE AND SURROUNDS

6.1 Existing conditions are as follows:

Description of Site and Surrounds
Site Area	The subject site comprises two parts with and overall area of 668 square metres (0.0668 ha.) and is formally known as Lot 2 on Plan of Subdivision 004323 (Parent Title Volume 02921 Folio 029 and Volume 02921 Folio 709).
Site description	The subject site is located on the north side of City Road, South Melbourne, approximately 20 metres east of the intersection with Boundary Road. This site has a frontage width of approximately 18 metres to City Road, this width continues into the site for approximately 21 metres, where it narrows to a width of 14.67 metres. The maximum depth of the site ranges from 20.6 metres up to 42.8 metres, for an overall area of 668 square metres. Length of accessible site boundaries: · City Road: 18 metres. · Unnamed Laneway designated R2949 (western abuttal): 20.02 metres. · Unnamed Laneway designated R2925 (western abuttal – partial leading to Boundary Street): 3.4 metres · Unnamed Laneway designated R2947 (northern abuttal): 14.67 metres. The land is generally flat with no discernible slope in any direction and generally sits at the same level as the abutting laneways to the north and west. The land is developed with a circa. 1990s tilt-slab concrete two-storey commercial building comprising a ground floor level showroom facing City Road and offices above. The rear portion of the site remains undeveloped and is used for at grade parking for vehicles for the site occupants and visitors. Figure 4: Aerial Photograph of site and surrounds (Source: IntraMaps, December 2022)
Surrounds/neighbourhood character	The surrounding land in all directions on the north side of City Road is mostly developed for one or two-storey commercial / industrial buildings, used for offices, car sales and repairs, light industry, warehousing and the like. However, a growing number of residential uses mainly midrise are being introduced, including a four-storey residential approval at 6-8 Boundary Street (Planning Scheme Amendment C204port) and four storey townhouse development at 10-16 Boundary Street containing 27 townhouses with basement parking approved under Planning Permit 293/2016. To the south of City Road, the built forms are primarily residential dwellings of up to two storeys in height, with intermitted commercial development scattered throughout. The southern part of the Montague Precinct is distinguished by its laneways and heritage buildings. The adaptive re-use of heritage buildings is promoted in policy, including the two buildings directly abutting the eastern boundary of the subject site at 588-590 City Road (HO509). South (City Road Frontage): City Road, a Transport Road Zone 2 (TRZ2), an arterial road with four carriageway lanes. Directly opposite is the Palace Hotel, a double storey heritage bar. Abutting this structure on all sides are residential dwelling of up to two storeys, most of which are heritage protected (HO442). West (between site and Boundary Road): Adjacent to the City Road frontage are three commercial buildings ranging from 1 to 2 storeys. Behind these commercial buildings is an unnamed laneway R2925 north of which are four single storey terrace dwellings fronting Boundary Road. North (between site and Thistlethwaite Street): Directly abutting the northern boundary of the site is the continuation of the unamend laneway, over which is the rear boundary of 10-16 boundary Street, a later infill medium rise residential development of up to 4 storeys containing 27 townhouses with basement parking approved under Planning Permit 293/2016. Part of the built form sits directly on the boundary with the unnamed laneway R2947. East (between site and City Road Street): Twenty-two commercial and industrial building of up to two storeys. Most buildings a later structure from the 1970’s onwards, however three sites (including the two directly abutting the subject site) are pre-war commercial buildings with heritage protection. Figure 5: Extract from submissions Urban relationship massing plan in relation to current built form. The subject site is located within close proximity of two light rail stops served by two separate tram routes to the CBD. The City Road light rail stop is 0.5km from the site. The 109 service stops here, connecting Port Melbourne to Box Hill via the CBD. The South Melbourne Market light rail stop is approx. 0.6km from the site. Route 96 services stops here, connecting St Kilda to East Brunswick via the CBD. Limited bus services run along City Road (234 service) between port Melbourne and the CBD. Vehicle access to the Westgate Freeway is approximately 600m from the site via City Road. The South Melbourne Central Major Activity Centre including South Melbourne Market is located approximately 500m to the east of the site, providing a wide range of employment, shopping opportunities and community services.
Fishermans Bend Framework October 2018	The Fishermans Bend Framework and the Planning Scheme propose: For the subject site: · City Road retained as a Strategic cycling corridor between CBD and Port Melbourne with no new crossovers permitted. · Mixed use medium / high (non-core activity) · Low-rise commercial and residential development of up to 6 storeys and 23 metres in height. For the surrounding area: Medium term (2020-2025) · Strategic cycling corridor / Bay Street to City bike connection along Buckhurst Street. · Buckhurst Street linear park running from Ferrars Street to Boundary Street. · Buckhurst / Montage Street intersection upgrade. Long term (2025+) · City Road route 109 (Stop 126) tram stop upgrade to the northwest of the subject site.

7. Permit Triggers

7.1 The following zone and overlay controls apply to the site. If the application was for a Planning Permit (rather than an application for a Planning Scheme Amendment), the following permissions would have been required:

Zone or Overlay	Why is a permit required?
Clause 36.04: Transport Road Zone 2 (TRZ2)	City Road is identified as a Transport Road Zone Schedule 2 - Principal Road Network. Pursuant to Section 2 of Clause 52.29-2, a permit is required to create or alter access to a road in Transport Zone 2. This may include a substantial increase in traffic to or from a Transport Zone. Consent to alter the kerbside conditions to City Road has not been sought. A disused crossover however is located to the City Road frontage. It is considered appropriate for this crossover to be removed.
Clause 37.04: Capital City Zone (CCZ1)	Pursuant to Clauses 37.04-1 and 37.04-2 of the CCZ1 and the Table of uses at Clause 1 of the Schedule to the CCZ1, a planning permit is required to use land for a Residential hotel and Retail premises (other than Hotel, Shop and Tavern) The use as a Residential hotel is a Section 1 use (no permit required) if the following conditions are met: · Must not be within an Amenity buffer shown on Map 4. · Must not be within 450m of the South Melbourne to Brooklyn or Dandenong to West Melbourne pipeline as shown on Map 5. · Must not be within 100m of the Port Melbourne to Symex Holdings pipeline as shown on Map 5. The use as a Retail premises (other than Hotel, Shop and Tavern) is a Section 1 use (no permit required) if the following conditions are met: · Must not exceed 1000 sq m gross leasable floor area and be located in a Core area. · Must not be within 450m of the South Melbourne to Brooklyn or Dandenong to West Melbourne pipeline as shown on Map 5. · Must not be within 100m of the Port Melbourne to Symex Holdings pipeline as shown on Map 5. The land is not in a Core Area, and within 450m of the South Melbourne to Brooklyn pipeline, therefore failing to meet the conditions required to be a section 1 use under this clause. The proposed uses would require a planning permit. Pursuant to Clause 37.04-4 of the CCZ1 and Clause 4.1 of Schedule 1 to the CCZ1, a permit is required to demolish or remove a building or works, except for: · The demolition or removal of temporary structures. · The demolition ordered or undertaken by the responsible authority in accordance with the relevant legislation or local law. Pursuant to Clause 37.04-4 of the CCZ1 and Clause 4.0 of the Schedule to the CCZ1, a permit is required to construct a building or construct or carry out works in the Capital City Zone, with the exception of an addition of, or modification to a verandah, awning, sunblind or canopy of an existing dwelling. A planning permit would be required under this clause for demolition, buildings and works. An application for the use of land, or to demolish or remove a building, or construct a building or construct or carry out works is exempt from the notice requirements of Section 52(1)(a), (b) and (d), the decision requirements of Section 64(1), (2) and (3) and the review rights of Section 82(1) of the Act. This does not apply to an application to use land for a nightclub, tavern, hotel or adult sex product shop. Note: The elevations detail a business identification sign to City Road and a high wall sign on the western elevation. Consent has not been requested for the construction and display of signage. It is flagged a planning permit would be required for these matters at a later date.
Clause 43.02: Design and Development Overlay - Schedule 30 - Fishermans Bend - Montague Precinct (DDO30)	The land is in Precinct Area M6 of DDO30 which encourages a Low-rise development that responds to the context and character of the adjacent low-rise neighbourhoods and a mandatory maximum building height of 23 metres and 6 storeys. Pursuant to Clause 43.02-2 of the DDO and Clause 2.0 of Schedule 30 of the DDO, a permit is required to construct a building or construct or carry out works in the Design and Development Overlay. An application to construct a building or construct or carry out works or subdivide land in DDO30 is exempt from the notice requirements of Section 52(1)(a), (b) and (d), the decision requirements of Section 64(1), (2) and (3) and the review rights of Section 82(1) of the Act. A planning permit would be required under this clause for buildings and works.
Clause 44.05: Special Building Overlay - Schedule 2 (SBO2)	Pursuant to Clause 44.05-2, a permit is required to construct a building or construct or carry our works. This does not apply if specifically exempted. Schedule 2 notes a permit is not required for the following buildings and works: · An open sided carport, or other open sided structure such as a verandah or pergola. · A fence that is the same height and constructed of similar materials as an existing fence. A planning permit would be required under this clause for buildings and works.
Clause 45.03: Environmental Audit Overlay (EAO)	Pursuant to Clause 45.03-1 of the EAO, before a sensitive use (residential use, childcare center, pre-school center, primary school, secondary school or children's playground) commences or before the construction or carrying out of buildings and works in association with a sensitive use commences: · A preliminary risk screen assessment statement in accordance with the Environment Protection Act 2017 must be issued stating that an environmental audit is not required for the use or the proposed use; or · An environmental audit statement under Part 8.3 of the Environment Protection Act 2017 must be issued stating that the land is suitable for the use or proposed use. The requirement for an environmental audit would be required prior to the ‘Residential Hotel’ use commencing.
Clause 45.09: Parking Overlay (P01)	Pursuant to Clause 45.09-1, the Parking Overlay operates in conjunction with the requirements of Clause 52.06. Table 1 of Schedule 1 to the Parking Overlay specifies maximum rather than minimum parking rates for Retail premises. A planning permit is required to provide car parking spaces in excess of the rates specified in Table 1. No spaces are to be provided for the retail premises. The use ‘Residential Hotel’ is not listed in Table 1 of the Overlay, nor Table 1 in Clause 52.06-5 as such parking will be assessed under Clause 52.06-6, parking to the satisfaction of Council. A planning permit would not be required under this clause.
Clause 45.11: Infrastructure Contribution Overlay (IC01)	Pursuant to Clause 45.11-2, a permit must not be granted to subdivide land, construct a building or construct or carry out works until an infrastructure contributions plan has been incorporated into the Planning Scheme. Pursuant to Clause 45.11-6, land or development of land is exempt from the ICO if it is for: · A non-government school. · Housing provided by or on behalf of the Department of Health and Human Services. · Any other land or development of land specified in a Schedule to the ICO. Pursuant to Schedule 1 to the ICO, a permit may be granted to subdivide land, construct a building or construct or carry out works before an infrastructure contributions plan has been incorporated into the scheme for: · An existing use of land provided the site coverage is not increased. · A sign. · Consolidation of land or a boundary realignment. · Subdivision of buildings and works approved by a permit granted before the approval date of Amendment GC81. · Subdivision of an existing building used for non-residential purposes provided each lot contains part of the building and each lot is not intended for a residential purpose. A planning permit cannot be granted for the proposal under this clause. The application for a Planning Scheme Amendment allows consideration of the application by an alternative process whilst the Infrastructure Contributions Plan is being prepared.
Clause 52.06: Car Parking	Pursuant to Clause 45.09-1 (Parking Overlay), the Parking Overlay operates in conjunction with the requirements of Clause 52.06. As noted above the car parking rates associated with the ‘residential hotel’ use is not listed in Table 1 of the Parking Overlay, or Table 1 of the Clause 52.06. As such parking will be assessed under Clause 52.06-6, aka parking to the satisfaction of Council. Car parking plans must meet the design requirements of Clause 52.06-9 unless the responsible authority agrees otherwise. A permit would be required under this clause.
Clause 52.34: Bicycle Facilities	A new use must not commence, or the floor area of an existing use must not be increased until the required bicycle facilities have been provided on the land pursuant to Clause 52.34-1. A planning permit is required to vary, reduce or waive any bicycle facilities requirement of Clause 52.34-3 and Clause 52.34-4. A total of 18 spaces are required for the ‘residential hotel’ use, and 1 space for the retail premises. Twenty (20) spaces have been provided meeting that required under this Clause. A planning permit would not be required under this clause as bicycle spaces and facilities are provided in accordance with this clause.

8. PLANNING SCHEME PROVISIONS

8.1 Planning Policy Frameworks (SPPF)

The following Planning Policies are relevant to this application:

Clause 11: Settlement, including:

Clause 11.01-1R1: Settlement - Metropolitan Melbourne

Clause 11.02: Managing Growth

Clause 11.03-6L-04: Fishermans Bend Urban Renewal Area

Clause 11.03-6L-05: Fishermans Bend Urban Renewal Area – Montague Precinct

Clause 13: Environmental Risks and Amenity, including:

Clause 13.01: Climate Change Impacts

Clause 13.03: Floodplains

Clause 13.07: Amenity

Clause 15: Built Environment and Heritage, including:

Clause 15.01-1: Built Environment

Clause 15.01-1R: Urban design - Metropolitan Melbourne

Clause 15.01-2S: Building Design

Clause 15.01-4R: Healthy neighbourhoods - Metropolitan Melbourne

Clause 15.01-5S: Neighbourhood character

Clause 15.02-1: Sustainable development

Clause 15.02-2S: Aboriginal cultural heritage

Clause 18: Transport, including:

Clause 18.02-4S: Car parking

Clause 19: Infrastructure, including:

Clause 19.01: Energy

Clause 19.01-1S: Energy supply

Clause 19.01-2R: Renewable energy - Metropolitan Melbourne

Clause 19.01-3S: Pipeline infrastructure

Clause 19.03-1S: Development and infrastructure contributions plans

Clause 19.03-4S: Stormwater

8.2 Other relevant provisions

Clause 52.05: Signs

Clause 52.06: Car Parking

Clause 52.34: Bicycle Facilities

Clause 65: Decision Guidelines, including:

Clause 65.01: Approval of an Application or Plan

Clause 72.04: Incorporated Documents.

8.3 Relevant Planning Scheme Amendments

Fishermans Bend Urban Renewal Area Development Contributions Plan

The Fishermans Bend Task Force - Department of Transport and Planning (DTP) has developed the Draft Development Contributions Plan (DCP) for public consultation, which provides detailed costings and indicative of over 120 essential infrastructure projects across the precinct. The total value of these projects (including land and construction) is estimated at approximately $2.44 billion.

The Draft DCP was place on public release for review and feedback between 1 December 2023 and 23 February 2024. All submissions are to be collated, analysed, and unresolved issues raised in submissions may be referred to the Precincts Standing Advisory Committee (Precincts SAC).

The Draft DCP is a single, three-in-one, State administered charge rate of $34,635 per dwelling and ($286 per square metre of non-residential gross floorspace). This comprises:

· $24,968 per dwelling for essential infrastructure – roads,

· $6,667 per dwelling for open space for public open space contributions, (replacing the current 8% public open space contribution)

· $3,000 per dwelling for major drainage and flood mitigation infrastructure (replacing any separate charge which may ordinarily have been levied by Melbourne Water).

The Draft DCP does not include a separate Community Infrastructure Levy.

The DCP will not be introduced into the relevant planning framework until after the Advisory Committee Report is released in July to August 2024.

It is noted that the Draft DCP proposes, “Accommodation uses will all be levied at the per dwelling rate, while the other land use categories will be subject to the non-residential floorspace rate”. (Page 59 of Fishermans Bend Urban Renewal Area Development Contributions Plan – Draft for consultation November 2023).

9. REFERRALS

9.1 Internal referrals

The application was referred to the following areas of Council for comment. The comments are outlined below.

Internal Department / Referral Officer	Internal Referral Comments
Heritage	There are no heritage issues with the proposal. The adjoining heritage places are significant independent of their context and changes to the immediate context will not impact upon that significance. The design has been amended from the original to include a ‘stepping down’ of the street wall. Planning Comments: As the proposed works directly abut a protected heritage place it is recommended that conditions be placed on any issuing decision that includes measures to protect the heritage fabric at 588 - 590 City Road, and that during the demolition of the subject site a suitably qualified heritage advisor be present.
City Strategy / Urban Design	The proposed revision to the architectural plans and the proposed use is generally supported from an Urban Design standpoint with key recommendations below. General recommendations: Referral of this pre-application to Melbourne Water is recommended given the site’s inclusion in MW future sea level rise area (based on flood data provided to council) and SBO2. Further Information is required on RL, FFL and level transitions from public realm into private realm. Please seek guidance from ‘Good Design Guide for Buildings in Flood Affected Areas in Fishermans Bend, Arden and Macaulay’ on mitigating level transitions integrated with street interface design. Ground Plane circulation: The ground plane strategy proposes primary activation and Hotel arrivals focused on City Road frontage and visual links to the northern bluestone laneway. This enhances passive surveillance from the active street frontage to the rear laneway. However, public circulation between the foyer and the car park requires resolution with respect to the legibility into the rear entrance from the laneway across the motorcycle and loading facilities. The additional provisions of amenities at the rear of the building are supported noting that these amenities facilitates activation and passive surveillance. Ground Floor Street Interface: The development proposes glass façade on the entirety of the ground floor street interface fronting City Road, which enhances visual permeability and aids passive surveillance for the pedestrian thoroughfare. Further information is required on glazing type and openings in the façade to allow better transparency and visual interest considering the current application of dark tinted glazing particularly on ground floor. Additionally, the revised arrangement of openings fronting the public realm facilitates active frontage and legibility into the café is supported. Upper Level Street Interface: The proposed upper level street facade is predominantly glazed, which is not a successful response to its context (such as heritage neighbours) and does not align with precedent images provided. More solid elements and depth of facade is therefore recommended. The revised design approach of the façade provides architectural interest by breaking the monotony of the glazing through introducing the vertical mullion elements integrated with glazed façade on the street wall is supported. The revised alteration on the south-eastern elevation fronting City Road providing depth and sympathetic response to the abutting character building is supported. Street Wall Height: The proposed development is abutted by sites ‘recognised’ for heritage value in Fishermans Bend Framework, however, does not have heritage overlay. The proposed street wall height is supported (4 storeys) on the basis of the heritage advice, that the proposed development does not significantly impact the abutting structures and a lower street wall height is not necessary.
Development Engineer	The designated flood level for the property at above address is 2.693 m AHD with a flood depth of the 0.225m. The SBO2 is encroaching into the property at the western boundary and slight encroachment at the front & rear of the property (below). The minimum required finished floor level (FFL) for habitable area is 2.993m AHD~ 3m AHD (2.693m AHD + 300mm) and non-habitable area is 2.843m AHD (2.693m AHD + 150mm) Referral comments We are satisfied (after the amendment) with the proposed finished floor level of the development as shown on the elevations as it meets the minimum required FFL Subject to implementation of the below flood mitigation measures. There are a couple of options for the applicant to adopt if to proceed with the proposed FFL. · Adopt flood barriers at the entrances at the front and rear (highlighted in yellow) interfacing with SBO2 to the minimum required FFL of 2.993m AHD. · Adopt watertight measures to the walls (in green) interfacing with SBO2 to the minimum required FFL of 2.993m AHD. · To be conservative, the height for installation of any electric vehicle charge point / switches in carpark area should be a minimum of 600mm above the flood level. Officer Comments: The car parking area is proposed at 2.62 AHD thus requiring an increase in the finished floor level of 0.38 metres above the abutting laneway. It is considered there is sufficient depth to the car parking area of facilitate a grade transition to the aforementioned finished floor levels. As will be discussed in greater detail below, the rear laneways (designated R2949 and R2925) will need to be upgraded to address the impacts form the proposal. In this instance the subject laneways do not have any formal drainage infrastructure and in order to address the flooding runoff from the subject site new drainage will need to be run from the subject site to the existing Council infrastructure on Boundary Road. At this stage more detailed information on the form of this drainage is not known and will require further research by the applicant.
Sustainable Design	The Sustainable Management Plan (SMP) by NJM Design, dated 12/12/23, states that the development will achieve a 4 star Green Star Buildings rating. The applicant has included a BESS assessment in the SMP but BESS isn’t relevant to development in Fishermans Bend. The SMP must be updated to include a Green Star Pathway demonstrating how a 4 star, Green Star Buildings rating could be achieved. Items required to be addressed via conditions: Conditions will be recommended when the application is re-referred. Full Assessment Comments by Category: IEQ: · Natural daylight to the bedrooms facing light courts will be poor, as demonstrated in Appendix A: Preliminary Daylight Analysis of the SMP. It shows that 27 of the bedrooms would receive very low levels of natural daylight. This is a bad outcome for occupant comfort and for energy use as lighting will need to be turned on during daylight hours. Energy: · The SMP states (pg. 10) that “every effort” will be made to minimise energy consumption for internal lighting. Details of how must be provided, such as use of LED lighting and timers/ motion sensors etc. Water: · Given that the development will be assessed against the Green Star Buildings rating tool the SMP should include a commitment to a defined % reduction in potable water use. · The rainwater tank notation on the ground floor plan must be updated to state, “connected to all non-potable water outlets”. Stormwater: · Comments updated on 25 January 2024: The WSUD response is acceptable. The rainwater tank notation on the ground floor plan must be updated to state, “connected to all non-potable water outlets”. Transport: · No comments. Waste: · No comments. Urban Ecology: · No comments. Building Management & Construction: · No comments. Materials: · The Materials section of the SMP (pg. 14) is weak and does not contain any actual commitments. · Use of low embodied energy materials will be required in order for the proposed development to achieve the required 4 star Green Star Buildings rating. Therefore, the SMP should contain clear commitments about the use of low carbon concrete and other low embodied energy materials such as green steel. Innovation: · There is no innovation.
Traffic Engineers	Car Parking It is acknowledged that the site is located within Fishermans Bend and that maximum car parking provisions apply. However, the provision of tandem parking is an issue as it won’t work with different users. The proposed tandem car parking arrangement will further undermine onsite parking and is not expected to provide efficient, and convenient access. Page 8 of the applicant’s traffic report refers to an empirical assessment based on a similar site in north Melbourne. The empirical assessment suggests a 0.3 car parking rate and based on this rate, the proposal would have a maximum of 25 spaces. Page 8 of the traffic report also states that at the North Melbourne site “there is a one on-street parking space that provides a convenient set-down and collection point at the front door of the site”. The proposal involves considerable parking shortfall and no drop-off/pick-up spaces are provided at the moment. It is noted that the proposal involves removal of a redundant vehicle crossover and accordingly has the capacity to gain one or two short-term on-street car space subject to Department of Transport and Planning (DTP) approval noting that City Road is an arterial road. While the traffic report has acknowledged this, Coucnil will need a public works plan that shows parking signage and its proposed restrictions, line-markings to the satisfaction of both Council and DTP. Layout It is noted that the proposed car park involves columns and therefore the proposed column locations within the car park are to be designed to comply with relevant sections of planning scheme and/or AS2890.1 requirements. It is unclear why page 14 of the traffic report states ‘Not applicable’ for columns. Car spaces abuts a wall needs to have extra 300mm clearance as per the AS2890.1. Plans need to comply with this. The carshare space need to be clearly line-marked and/or signed in accordance with relevant standards. The onsite loading bay needs to be clearly line-marked (and/or signed) as per relevant standards. The maximum length of vehicle that can successfully utilise the loading bay would be a small rigid vehicle (SRV) with a maximum length of 6.4 metres therefore waste collection on site would not be possible (see further discussion below Section no 12.7 and 12.8 of this report). Access The swept-path assessment needs to include access and egress to/from car space 9 and 10 (next to loading bay) There is an issue in terms of pedestrian sightlines where laneway connects with Boundary Street due to existing high structures (fences and walls) on either side – the traffic report is silent on this. The laneway appears to have no-street lighting which would then cause night-time visibility concerns. The application, at very least, should provide some lighting attached to the building without unduly impact upon other users and adjacent properties. Waste Management Plan needs to amend to show an onsite collection via 6.4m rear mini loader as per swept paths in the traffic report. The car park at the loading point needs to have appropriate ceiling height to facilitate rear mini loader access and onsite garbage collection (i.e. lift the bins). It is noted that when a waste truck or loading vehicle is parked in the loading bay, access to/from proposed motorcycle parking spaces and bicycle spaces are problematic. Consideration needs to begiven to re-design (or relocate) the proposed motorcycle parking spaces and bicycle parking spaces at the rear without impacting waste collection and loading/unloading process. Pedestrian Access it is recommended that a canopy be provided within the site frontage, in accordance with relevant building code requirements, to protect pedestrians from weather conditions. Other The laneway between Boundary Street and the subject site appears to be in poor condition. Therefore, consideration needs to be given to requiring the applicant to design and construct this section of the laneway in accordance with relevant Council’s Standards/Specifications. This would need to cover relevant drainage components - Our Asset Management Team will be able to guide and further advice. The existing splay at the north-west corner needs to be retained – see below.
Waste Management	Review In line with the Guidelines for Preparing a Waste Management Plan 2021 – City of Port Phillip, the WMP review identified the following points needing attention: Waste Generation · Gym and office waste generation estimates should be separated. · Proposed number of bins provided for each tenancy needs to be clarified: - Clarity is required on the proposed bin quantities provided in ‘type of bin’ and ‘number of bins’ as they do not align. - Proposed number of bins provided and type of bin (size i.e., 1100L, 120L) need to be separated by stream type as well as tenancy. Bin Storage room · Separate refuse rooms are required for commercial and residential tenants to avoid contamination of waste. · Detail each bin room size and layout. · A minimum 1.5m corridor and door width is required when using 1100L bins. - The architectural plans are inconsistent with the drawing provided in the WMP. The plans show a single door to the waste storage room, whereas the WMP shows a double door. - Please confirm that all door clearances are 1.5m at a minimum. · Ensure sufficient manoeuvring space is available in the bin storage rooms, please review. · Provide a description of security and access arrangements for the waste storage rooms. Waste systems · Each dwelling and tenancy must provide access to an internal storage space within to enable the separation of each waste stream as appropriate (general waste, recyclables, food waste and glass materials). Provide a description in the WMP. · Disability access to all waste and resource recovery facilities and services, including access to bin chutes and bin rooms must be considered. Please provide a description of this. · Provision of an electronic waste (e-waste) recycling bin / skip: - CoPP require all new developments to allocate space for e-waste recycling storage, management, and disposal facilities through private contractor. - Allocate space for e-waste in the bin room. · Noise reduction needs to be considered in the waste management plan. Please include waste collection times in reference to: - Council Local Law No.1 for domestic waste; and - Council Local Law No.1 for industrial, trade, and commercial Scaled waste management drawings · Include a scaled figure in the WMP showing: - Bin room sizes. - Size of bins. - Hard waste storage area. - E-waste bin. - Bin wash area. See figure 3 of CoPP Guidelines for preparing a WMP. Planning comment: Concerns are raised with the loading bay being accessible by anything larger that a small rigid vehicle (SRV) with a maximum length of 6.4 metres. Given this the waste management plan prepared by TTM is requiring that all waste trucks would park on Boundary Street during Collection. See extract below. Concerns are raised with the impacts on parking, and sight lines, along Boundary Street, due to the waste management vehicles parking along the curb. The loading and unloading process is also of a concern given the amount of time, noise and associated amenity impacts of manoeuvring 1100 litre bins at least 25 metres along a bluestone laneway. The laneway is likely going to be more highly relied on to provide access to other properties in future as the sites are developed as such blocking access to the laneway will become ever increasingly problematic. The laneway will likely need to be reconstructed at some point to deal with the lack of drainage infrastructure and increase in traffic, but further assessment is required before this can be determined.
Landscape Architect	Recommendation To gain support from a landscape perspective, the following detailed recommendations are made: · A condition should be applied requiring a set of landscape plans, reflecting the architectural design and the following recommendations included but not limited to: o Material and Surface Finishes – Layout of surface finishes and materials on a plan o Planting Schedule – include mature size (h and w), common name, botanical name, installation size. Species should be indigenous and respond to site conditions. o Deep Soil Plans – should show soil depths for in ground and upper levels include soil depths for all planters 1000mm min for planters with trees and 550mm for planters with plants only. o Details – showing construction of planters and all other finishes – including drainage. o Irrigation plan o Sections – showing key sections of ground floor and upper levels. o Material Palette – palette of proposed material and finishes. o Fixtures and furnishes – location of seating, benches, furniture, and amenities to understand space program and function. o Maintenance management plan – how will the landscape spaces be maintained, accessed, and cared for. Ground floor · Explore opportunity to provide a setback and provide raised planters along the Café interface. · The design does not provide improvements to the amenities on the public realm. This should be explored as part of a set of landscape plans. · Deleted · Provide detail on the planting within the foyer – currently no detail shown regarding planter widths, species, and overall soil volume. Further clarity required regarding planting including access to sunlight, drainage and maintenance needs to be shown. Level 1 · Provide detail on the planting/greenery within the light wells. The current design does not show soil volumes, species and how these spaces are maintained. Level 2 & 3 · Provide detail on the planting on Level 2 & 3. The arrangement of the planting is also not consistent and required further rational. Details into width of raised planters, species, maintenance, and accessibility needs to be provided as part of a set of landscape plans. Level 4 · Provides detail on the raised planters, species, and maintenance. Details into width of raised planters, species, maintenance, and accessibility needs to be provided as part of a set of landscape plans. · Provide additional amenities within the pool area, including seating, planting. · Provide privacy screening for the 1 bedroom adjacent the pool area. Rooftop · Provide detail on the rooftop design in the form of a landscape plan.

9.2 External referrals

The Minister for Planning C/- the Department of Transport and Planning is responsible for administering referrals for this Planning Scheme Amendment process.

10. PUBLIC NOTIFICATION/OBJECTIONS

10.1 As the Minister for Planning is the Planning Authority for this matter, they are responsible for administering public notification and deciding the extent of public notification.

11. FISHERMANS BEND STANDING ADVISORY COMMITTEE

11.1 The Minister has appointed the Fishermans Bend Standing Advisory Committee (the SAC) to advise on site specific planning controls to facilitate proposals to redevelop land within Fishermans Bend prior to the introduction of the Infrastructure Contributions Plan.

11.2 The Minister has prepared Terms of Reference

11.3 The Minister is yet to decide whether the proposed amendment is to be referred to the SAC for independent advice. Notwithstanding this, Council must form a view on the draft amendment which will assist the department of Transport and Planning identifying key issues for consideration and whether a referral to the SAC is warranted.

11.4 A summary of the SAC Assessment and Hearing provisions of the Terms of Reference and a copy of the Terms of Reference are included as an Attachment to this report.

12. OFFICER’S ASSESSMENT

An assessment of the application against the Fishermans Bend Standing Advisory Committee Terms of Reference is as follows:

12.1 Responding to Local Policy

Clause 11.03-6L-04 Fishermans Bend Urban Renewal Area Policy

Officer Assessment

11.03-6L-04 Employment floor area objective

Development in a Core area should provide a minimum floor area ratio not used for dwelling of:

Montague: 1.6:1. Exceptions apply.

Not applicable

The site is not in a core area.

Proposed:

GFA (whole tenancies): 2027.8m²

2027.8m² / 668m²= 3.03

Proposed plot ratio: 3.03:1

11.03-6L-04 Design Excellence objective

· Encourage varied built form typologies that align with the preferred precinct character specified in the relevant Schedule to the Design and Development Overlay.

· Encourage fine grain, pedestrian scale environments.

· Ensure buildings contribute to a high quality public realm.

· Encourage developments to deliver spaces, including open spaces, for people to meet, gather, socialise, exercise and relax.

· Ensure developments to deliver variation in massing, building height, and roof forms and the staggering or offsetting of tower footprints.

Not achieved

Recommended:

Area M6 - Predominantly low-rise developments (i.e. up to and including 6 storeys) that responds to the context and character of the adjacent low-rise neighbourhoods. The subject site has a mandatory height of 23 metres and 6 storeys, with a maximum 4 storey podium height with 10 metre mandatory setback from the street wall (see Table 3 and Map 2 of Schedule 30 of the DDO).

Proposed: 6-level building (including the roof top terrace) comprising a four-level podium and a 2-level tower.

· Podium: 14.65m/ 4 levels.

· Tower: 22.8m (including pergola over roof terrace) / 6 levels. Including lift overrun 24.38m.

The proposal will in the short term contribute to a “variation in massing and building height”. However, given the proposal maximises the built form on the site, by being built directly on all property boundaries, up to the maximum height allowable under the DDO30, this will likely in future become the built form norm, as the surrounding sites also develop to the full extent of the DDO30.

The proposal should incorporate a greater mix of materials, and variation of built form to the northern and western boundaries. The use of vertical screening running up 5 of the 6 levels of the boundary and running along the majority of the interface with the rear laneway results in excessive visual bulk to the residential premises adjoining these interfaces.

In order to support the proposal, the louvers would need to be relocated internal to the subject site (currently they extend over the laneway), and a greater mix of materials, and screening devices would need to be incorporated to break up the building bulk.

Under the DDO30 the following elements may exceed the specified height: non-habitable architectural features not more than 3.0 metres in height. As the structure has an open roof and does not form a ‘ceiling’ as it permeable it is considered that the structure meets this exemption and should be supported given the improved amenity for future occupants.

11.03-6L-04 Achieving a climate adept, water sensitive, low carbon, low waste community

Energy: Assess against:

· Should achieve a 20% improvement on current National Construction Code energy efficiency standards including for building envelopes, lighting and building services.

Achieved in part:

The SMP commits to a 4 star certified Green Star Design, which is appropriate for a development of this scale and is consistent with mandatory condition requirements in Schedule 1 of the Capital City Zone (CCZ1).

A 4kW solar photovoltaic (PV) renewable energy

system is proposed to offset the overall electricity consumption of this development.

Whilst this technically meets the objective, given the likely power demands of the building this is unlikely to significantly offset the demand.

Urban heat island: Assess against:

· At least 70% of total site to comprise building or landscape elements that reduce impact of urban heat island effect, including:

- Vegetation, green roofs and water bodies.

- Roof materials, shade structures, solar panels or hard scaping materials with high solar reflectivity index.

- Non-glazed facade materials exposed to summer sun that have a low solar absorptance.

Achieved in part:

The SMP commits to achieving a 4 Star Green Star Design. The Urban Heat Island Effect is to be partially mitigated by the provision of 10% of the site with vegetation, and the incorporation of hanging vegetation on the southern façade.

The Solar Reflectance Index (SRI) of the non-glazing materials has not been provided on the plans or other documentation.

Large expanses of the western and northern elevations incorporate render colour ‘R1’ which is a light-coloured render which should reduce the absorption of light and heat.

However, the darker colour ‘R2’ is a dark brown which would absorb most of the solar energy failing to achieve this objective.

As the majority of the north and west elevations are glazed and utilise external louvers for shading, the solar absorption should to some extent be mitigated, achieving partial compliance.

Flooding: Assess against:

· Applying design elements and materials that are resilient to flooding, including waterproof doors and windows, elevated power outlets and the like.

Achieved in part:

The revised plans and elevation drawings and application documentation provide limited details of how the flood impacts would be mitigated.

The increase in height of the finished floor levels of the habitable areas of the ground floor have been raised to a height of 3 metre AHD, as per advice provided by Melbourne Water.

However, portions of the site, being the rear car parking area, and the entrance ramp into the hotel lobby will fall below the flood level.

Whilst the in principal response of having sacrificial parts of the building incorporated to deal with the change in floor levels is supported more detail needs to be provided with regards to how these areas will be managed, and damage from flooding mitigated.

The car parking area is proposed 2.62 AHD thus requiring an increase in the finished floor level of 0.38 metres. It is considered there is sufficient depth to the car parking area of facilitate a grade transition to the aforementioned finished floor levels.

Flooding: Assess against:

· Encouraging land uses at ground floor level that can easily recover from the impacts of temporary flooding.

Achieved in part:

The areas of ground floor level set at 3.0m AHD would have satisfactory protection from predicted flooding and so would be able to easily recover. The areas of ground floor without confirmed floor levels or with inconsistent depiction of floor levels as described above need to be reviewed / revised to incorporate flood protection such as raised floor levels or other protection / mitigation measures to the satisfaction of Melbourne Water.

Flooding: Assess against:

· Integrating changes in floor levels between the street and internal ground floor into the design of the development.

Achieved:

The Melbourne Water minimum ground floor level of 3.0 AHD requires a 0.63 metre increase from the existing City Road street level of 2.37 AHD.

The steps and ramp level change from City Road to the raised ground floor would be satisfactorily integrated into the building design, with good visual connection between street and interior.

Flooding: Assess against:

· Locating essential services, such as power connections, switchboards and other critical services to avoid disruption in potential flooding events.

Achieved

The revised plans and elevation drawings show that the core area, and other critical services, will be sited at 3 metres AHD as per the Melbourne Water flood advice.

WSUD: Assess against

· Development and public realm layout and design should integrate best practice Water Sensitive Urban Design.

Achieved

The proposed stormwater solution for this development is to treat all roof runoff, which is approximately 539.2 m2, by directly connecting runoff to a 28.8kL belowground rainwater tank located in the ground level car parking area. The 28.8 kL rainwater tank is greater than the requirement of a 27kL tank as outlined in Capital City Zone, Schedule 1.

Council’s Sustainable Design Officer advised they were satisfied with the WSUD assessment subject to the mandatory rainwater tank be connected to all non-potable outlets in the building via the building wide third pipe network. This could be provided for by conditions of any Incorporated Document.

11.03-6L-04 Communal open spaces

Create private and communal spaces within developments with a range of facilities, garden and recreation areas to supplement the public open space network.

Achieved:

The design includes no private outdoor space for the occupants, instead providing two key communal open space areas.

The main area is the roof top terrace, which is primarily a barbeque and seating area for hotel guests. The other is a pool side area located on top of the podium against the front façade.

Both areas include indicative planters around the edges of the spaces to help soften the extent of hard surface.

Council’s Landscape Architect has reviewed the plans and is requesting an improved landscape outcome which will be discussed below.

Ensure landscape areas:

· Contribute to creation of sense of place and identity and preferred character for the precinct.

Not achieved:

The design includes indicative planters to the edge of communal terraces. Council’s landscape architect stated that the initial intent of the proposed landscaping scheme is generally supported but not enough detailed information has been submitted at this stage to offer full support. Areas for improvement to gain support:

· Explore opportunities to provide a setback and provide raised planters along the café interface.

· The design does not provide improvements to the amenities on the public realm. This should be explored as part of a set of landscape plans.

· Explore relocating the booster to be more concealed within the design. It features prominently along the City Road interface – this space would be improved with planting and amenities.

Ensure landscape areas:

· Incorporate innovative approaches to flood mitigation and stormwater run-off, and best practice WSUD.

Achieved in part:

Stormwater run-off, and best practice WSUD is achieved but information provided does not include any innovative approaches regarding flood mitigation.

Encourage plant selection to:

· Support complex and biodiverse habitat including native and indigenous flora and fauna.

Not achieved:

A Landscape Plan has not been provided.

Encourage plant selection to:

· Balance provision of native and indigenous plants with exotic climate resilient plants that provide opportunity for biodiversity.

Not achieved:

A Landscape Plan has not been provided.

Encourage plant selection to:

· Support creation of vegetation links within FB to surrounding areas of biodiversity, plant selection design.

Not achieved:

A Landscape Plan has not been provided.

Encourage plant selection to:

· Incorporate green facades, rooftop, podium or terrace planting into development that is water efficient, responds to mico-climate conditions and is located and designed to be sustainable and resilient.

Not achieved:

A Landscape Plan has not been provided.

Consider as relevant:

· Minimum deep soil areas with a minimum depth of 1.5 metres for canopy trees.

Not achieved:

A Landscape Plan has not been provided, it is further questioned the level of vegetation that could establish due to wind and partial canopy cover for the communal terraced areas.

11.03-6L-04 Sustainable transport

Ensure development does not compromise the delivery of future public transport including new tram, train and bus routes.

Achieved:

The development would not compromise the delivery of future public transport including new tram, train and bus routes.

Reduce impacts of new vehicle access points on pedestrian, public transport and bicycle priority routes.

Achieved:

The redevelopment of the site would not impact any new vehicle access points on pedestrian, public transport and bicycle priority routes.

It is noted there is an opportunity to improve the public realm to City Road by removing the redundant crossover. Express consent to alter the kerbside conditions to City Road has not been sought. Such an alteration would trigger a permit given the site’s abuttal to a TRZ2.

Design internal connections to give priority to pedestrian and bicycle movements. Provide easy access to bicycle parking facilities, including end of trip change rooms, showers and lockers.

Achieved in part:

As there is only on-site loading provided, there is limit opportunity for traffic conflicts with pedestrian and bicycles.

The plans show details of bicycle parking facilities, including change rooms, showers and lockers but do not detail the design and dimensions of bike parking spaces and associated areas / enclosures and can be required as a modification as part of the Incorporated Document.

Encourage developments to provide less than preferred maximum number of car spaces.

Achieved:

On-site car parking provision is less than the maximum allowable under the PO1.

Encourage developments to provide for future conversion of car parking to alternative uses.

Achieved:

The removal of on-site car parking can facilitate the adaptability of the space for future commercial uses or similar.

11.03-6L-04 Land use transition

Ensure new uses and expansion of existing uses with potential adverse amenity impacts do not prejudice the urban renewal of Fishermans Bend.

Achieved:

The proposed uses would not prejudice the urban renewal of Fishermans Bend.

Ensure new development addresses the amenity impacts of nearby existing uses.

Not applicable

The subject site is not located in an area where unreasonable amenity impacts current exist or are expected to occur in the future.

12.2 Clause 37.04: Capital City Zone (CCZ1)

Use of Land

12.2.1 Use of the land for a Retail premises (other than Hotel, Shop and Tavern) and Residential hotel requires a permit because the land is within 450m of the South Melbourne to Brooklyn pipeline.

12.2.2 All uses are considered satisfactory for the site, subject to conditions and for management of amenity impacts such as noise emissions, waste, and traffic/parking impacts.

Buildings and Works Requirements

12.2.3 Buildings and works must be generally in accordance with the Urban Structure, Amenity Buffer, Pipeline Buffer and Transport and Infrastructure maps of the Schedule to the CCZ, discussed below.

Map 1: Urban Structure seeks (Secondary type 1) proposals to have an active frontage with 60% permeability facing City Road.

Map 3: Amenity Buffers the site is not located within any amenity buffer areas.

Map 5: Pipeline buffers includes the land in the 450m buffer of the South Melbourne to Brooklyn gas pipeline. The proposed developments would be satisfactory subject to conditions for any protection measures required by the gas pipeline authority,

Map 6: Transport Infrastructure shows the site is proximate to the Route 96 and 109 tram corridor and would not adversely impact on any proposed future transport infrastructure.

Demolition Requirements

12.2.4 A permit is required to demolish or remove a building, unless it is for the removal of temporary structures or ordered by the responsible authority.

Conditions on Permits

12.2.5 Clause 4.3 of Schedule 1 to the CCZ sets out mandatory conditions to be included on permits (as relevant). The listed conditions for:

· Green star rating; and

· Third pipe and rain tank;

should be included in any approved Incorporated Document for the proposal.

12.3 Clause 43.02: Design and Development Overlay - Schedule 30: Fishermans Bend - Montague Precinct (DDO30)

Building Typologies

12.3.1 The land is in Precinct Area M6 of DDO30 which encourages a Low-rise (i.e. up to and including 6 storeys) building typology and a mandatory maximum building height of 23 metres (and 6-storeys).

12.3.2 The proposal achieves the preferred precinct character of predominantly low rise buildings. The proposal meets the definition of low-rise in the scheme and is responsive to its context and character. The proposed built form is indicative of its location on the boundary of Fishermans Bend Urban Renewal Area and its interface with lower scale residential areas.

Building Height

12.3.3 The proposal would achieve the preferred precinct character of predominantly low-rise buildings with a maximum height of 6 storeys.

12.3.4 The building is defined as a low-rise podium and tower form, with a 4-storey podium and 6-storeys overall, meeting the M6 controls within the DDO30 (see Map 2). The built form in general would fall within the required height limits proposed.

12.3.5 Non-habitable structures less than 3 metres in height would extend beyond the parapet. This would accord with height allowances in the DDO for such structures. Building services and the rooftop terrace would be setback at least 3.0 metres behind the City Road façade also in compliance with the DDO30 controls.

Street Wall Height

12.3.6 The intent of the City Road built form guidelines is to provide low-rise developments that respond to the context and character of the adjacent low-rise neighbourhoods. A core feature of this is the height and form of the street wall. In this instance the interface with City Road Specifies a height of 4 storeys, to deliver an appropriate human scale street wall, that also appropriately transitions to an adjoining heritage place.

12.3.7 The street wall height is proposed at 4 storeys and 14.65 metres high, in line with that specified under the DDO30. The podium also incorporates a recessed portion of the built form at the 2nd level that aligns with the parapet of the two commercial heritage significant buildings to the east (see below).

12.3.8 The material palette would also draw on the existing materiality of the area. The fenestration pattern would adopt a horizontal emphasis at the parapet level of the adjoining properties to both sides while the distinction in curved glazing elements / surrounds on the vertical plane would assist in maintaining the street rhythm and finer grain pattern along this portion of City Road

Figure 6: Street wall height response to DDO30 and Heritage Place HO509

12.3.9 Subsequently the street wall suitably reflects the preferred built form height for future development, whilst respecting the existing height of the heritage place. The form as proposed is supported by both Council Urban Designers and Council’s Heritage Advisor.

Street wall setbacks and setbacks above street wall

12.3.10 The podium is proposed to be constructed to all boundaries apart from minor variations at some levels of up to 1m to facilitate weather protection for the main entrance, and a visual break to match the height of the parapet of the heritage buildings abutting to the east.

12.3.11 The tower portion of the built form above the podium is setback 10 metres in line with the minimum requirement outline in Table 4 within Schedule 1 of the DDO30.

Tower Height

12.3.12 Precinct mandatory building height: 6 storeys and/or 23 metres.

Proposed: 21.58 metres/ 6-levels on the boundaries (22.8 metres including the pergola over the roof terrace).

Including plant, and lift overrun the height is 24.38 metres.

12.3.13 As previously discussed, the addition of the cover over the roof top terrace, does not result in the roof top terrace being a 7th storey. As such the height including the pergola at roof level can be supported as it is in keeping with the M6 controls within the DDO30 (see Map 2).

Side and rear setbacks

12.3.14 To the rear laneway (western interface), the proposed walls above are constructed to the title boundary but for a rebate of only 1.44 metres at the ground level. This small variation to the build-to-the-boundary objective is proposed to the adjacent laneway at ground floor level in deference to Melbourne Water requirements and achieving required vehicular manoeuvring swept paths.

12.3.15 The proposed variations to the setbacks are considered minor in nature and would not undermine the interface with the laneway or its primary service functionality.

12.3.16 Concerns are also raised with the vertical louvers at the upper levels, hanging over the site boundary onto the public laneway along the western and northern elevations (see highlighted yellow below).

Figure 7: Extract of ground floor plan (TP101 Rev A).

12.3.17 Given the laneway does not form part of the subject site any structures overhanging the boundary, particularly over the public realm, cannot be supported. It is recommended that the screening be redesigned to sit within the site boundary, this may result in minor recesses to the window framing to ensure an appropriate level of articulation and depth to the façade is achieved. Concerns are also raised with the visual bulk created by the extent and vertical forms of the screening presented to this interface, which will be discussed separately.

12.3.18 Under the Design and Development Overlay – Schedule 30 the policy at Table 5 directs that part of a new building below the Maximum Street wall height should be built on or within 300 millimetres of a side boundary.

12.3.19 A new building not on or within 300 millimetres of a boundary:

· Should be setback at least the preferred setback of 10 metres from the side or rear boundary.

· Must be setback at least the Minimum setback of 5 metres from the side or rear boundary.

12.3.20 In general, the side setback meets these requirements, however, from level 1 and above the built form introduces three light courts against the eastern boundary which are proposed to be setback 6m which is only marginally exceeding the minimum setback required under the DDO30. Given the narrowness of the site extending these lightwells out closer to the 10 metre preferred depth would require a significant redesign of the building layout and is considered an unreasonable burden on the development of the site.

12.3.21 Whilst the reducing the setback along the entire eastern boundary to less than 300mm would be the preferred option, a number of the proposed hotel rooms rely solely on these lightwells for natural light and ventilation. At a setback of 6 metres, it is considered that enough of a light void is provided to ensure that if adjoining sites are re-developed in future the internal amenity of these rooms would be protected. It is considered the proposed number and size of lightwells could be rationalised if rooms were consolidated and a larger lightwell/s was provided. Such an arrangement would not burden the adjoining development site to replicate a similar design response. The proposed hotel rooms would rely on this larger light court for natural light and ventilation, ensuring that if adjoining sites are re-developed in future, the internal amenity of these hotel rooms would be protected, including for future adaptability.

12.3.22 Notwithstanding the suggested improvements, the proposed design response is considered acceptable, subject to recommended conditions.

Overshadowing

12.3.23 Buildings must not cast any additional shadow above the shadows cast by hypothetical buildings built to the maximum street wall height and existing buildings over:

· The existing residential zoned land south of City Road and east of City Road between the hours of 11.00am and 2.00pm on 22 September.

· The existing or new public open spaces shown in Map 4 of this schedule between the hours of 11.00am and 2.00pm on 22 September.

12.3.24 In accordance with objective 2.6 of the DDO30 the proposed plans have demonstrated that shadowing from the built form will fall only 19.5 metres to the south of the proposal. Given City Road (and road verges) extend 30 metres to the south, no shadow will fall into the existing residential area to the south between the hours of 11.00am and 2.00pm on 22 September. Given this has been suitably demonstrated, the built form achieves this objective.

Active Street Frontages

12.3.25 City Road is designated a Secondary Type 1 (60% permeability) active frontage which seeks at least 60% clear glazing along the ground level frontage to a height of 2.5m, excluding any solid plinth or base.

12.3.26 The elevation drawings and renders detail the City Road façade at ground floor incorporating floor to ceiling glazing in excess of 2.5m height but the drawings lack a dimension to confirm. As depicted the façade meets the above active street frontage requirements.

12.3.27 On more detailed review concerns are raised with the lack of primary services on the plans. No details of fire boosters, or electrical substations which will likely need to be incorporated into the façade have been provided. The plans should be amended to accurately show the location and design of the fire boosters, which should be minimised in size and architecturally resolved within the building design.

12.3.28 Council’s Urban Designer noted further information is required on glazing type and openings in the façade to allow better transparency and visual interest considering the current application of dark tinted glazing along the ground floor road verge.

12.3.29 A review by Council’s landscape architect has also raised concerns with the lack of planting opportunities along the café interface, along with lack of any improvements to the public realm in front of the site. It is recommended that planter beds be incorporated into the ground level façade. Council does not support any encroachment of doors over public land.

Adaptable Buildings

12.3.30 Adaptable buildings should incorporate elements as follows:

Adaptable Building Assessment (DDO30)
Building element	Adaptability opportunity	Compliance
Lower levels up to the height of the street wall	At least 4.0m floor-to-floor height at ground level At least 3.8m floor-to-floor height for other lower levels	Fails to be Achieved: Ground level floor-to-floor height: 4m for its entirety. Podium levels 1 to 3 floor-to-floor height: 3.15m
Car parking areas	· In areas not in a basement: Level floor. · A floor-to-floor height at least 3.8m. Mechanical parking systems to reduce the area required for car parking	Achieved: A 4m floor-to-floor height has been achieved throughout the car parking area and loading bay.
Internal layout	Minimal load bearing walls to maximise flexibility for retail or commercial refits.	Achieved: No load bearing wall exist within the proposed retail space, allowing flexibility for future fit outs.

12.3.31 The ground floor of the building meets the adaptability standards and is appropriately designed for its proposed retail. The upper-level floorplates generally achieve a floor-to-floor height of 3.15 metres which is considered low given services between floor level, usually accounting for 300mm, need to be provided. The proposed heights fail to meet the 3.8 metre minimum sought to facilitate adaptability for multiple uses. It is strongly recommended this element is reconsidered as part of the overall design, noting that many commercial buildings and approvals in the area, whilst complying with the number of storeys, always generally exceed the numerical height specified in metres of the DDO control.

Building Finishes

12.3.32 The building presents to City Road as a mixture of tinted glazing and charcoal shades of applied finishes; glazing in charcoal and gold; dark brown render/cladding finishes; and portion of brick tile above the ground floor, presented in grey finish. The articulation includes a vertical emphasis with rounder arch cladding elements to break up the extend of built form and reflect the materiality of more historical building in the immediate surrounds.

12.3.33 The proposed upper level street facade is predominantly glazed, which is not a successful response to its context (such as heritage neighbours) and does not align with precedent images provided. More solid elements and depth of facade is therefore recommended.

12.3.34 The revised design approach of the façade provides architectural interest by breaking the uniformity of the glazing through introducing the vertical mullion elements integrated with glazed façade on the street wall is supported. The revised alteration on the south-eastern elevation fronting City Road providing depth and sympathetic response to the abutting character building is supported.

12.3.35 The canopy breaks up the building façade and would provide suitable weather protection for the footpath. However, the plans show conflicting information as to whether the structure extends for the entire width of the road abuttal or only runs for the width of the café space. Greater details of the structure, including widths, depths and materiality need to be provided before more detailed comments could be provided.

12.3.36 The design response provides for a well-articulated, innovative, and visually interesting presentation to the public realm, subject to amendments noted above, and would generally be viewed and positively experienced from many surrounding vantages within and outside Fishermans Bend.

12.4 Clause 45.09: Parking Overlay and Clause 52.06: Car Parking

12.4.1 The subject site is within the Parking Overlay pursuant to Clause 45.09 of the Planning Scheme. The Parking Overlay specifies maximum rather than minimum parking rates for Retail premises use.

12.4.2 An assessment of car parking rates and provision is set out at as follows:

Car parking rates and provision (PO1)
MAXIMUM CAR PARKING PROVISION	PROPOSED CAR PARKING PROVISION
Retail premises: Max. 1 space / 100m² gross floor area (Clause 45.09)
170.2m² x 1/100 = 1 (1.7) space	Total: 0 spaces. Complies

12.4.3 No Permit is required for the parking provision for the retail use.

12.4.4 The use ‘Residential Hotel’ is not listed in Table 1 of the Overlay, nor Table 1 in Clause 52.06-5 as such parking will be assessed under Clause 52.06-6, parking ‘to the satisfaction of the Responsible Authority.

12.4.5 The Fishermans Bend Framework Plan sets out Sustainability goals including A connected and liveable community where, “… people will be connected through integrated walking, cycling public transport links that will make choosing to Sustainable transport options easy…. Activity cores will be located near public transport and include community services and public spaces to ensure the people can access their daily needs close to where they live and work. These reliable and sustainable transport options will mean fewer than one in five trips will be made by private car.”

12.4.6 General strategies for Fishermans Bend at Clause 11.03-6L-05 seeks to, “Encourage the highest concentration and mix of uses in the defined core areas, located on public transport nodes and routes to increase public and active transport use, reduce car dependence and promote multi-purpose trips”.

12.4.7 Policy provides clear direction in encouraging a modal shift towards sustainable transport modes and a reduction in car dependency.

12.4.8 The subject site is close to light rail and bus routes and is within walkable distance to convenience shops and services popular with office workers in South Melbourne in the short term until the strategic vision set out for Buckhurst Street and the Montague core area is realised.

12.4.9 The site is also in an area that experiences very high traffic volumes, where it is desirable that new developments minimise additional traffic generation.

12.4.10 Notwithstanding this, Council must consider whether the provision of 10 parking spaces (eight of which being in a tandem arrangement) would result in unreasonable parking pressure within the adjoining street networks.

12.4.11 Page 8 of the applicants traffic report refers to an empirical assessment based on a similar site in North Melbourne. The empirical assessment suggests a 0.3 car parking rate and based on this rate, the proposal would require 25 spaces.

12.4.12 Page 8 of the traffic report also states that at the ‘North Melbourne site’ use for comparison has one on street parking space that provides a convenient set-down and collection point at the front door of the site”.

12.4.13 The proposal involves considerable parking shortfall and at the same time no drop-off/pick-up spaces are provided. The traffic report at page 9 states: “The development is proposing a kerbside setdown/collection area at the front of the site in place of the existing vehicle crossover”, this is not shown on the plans, and will be at the discretion of the Department of Transport, so there is no guarantee this would be supported.

Figure 8: Site frontage to City Road (including no standing zone, 1 hour parking, and existing redundant crossover)

12.4.14 As shown above, there is an existing no-standing zone directly in front of the site, and a row of 1 hour car parks running from the site to the north (during the hours of 8am to 6pm Weekdays). The one-hour time limit would result in a reasonable turnover of vehicles during business hours, but if the proposed drop off/ pick up point is not supported by the Department of Transport, the surrounding parking spaces may need to be converted to 15 minute spaces to facilitate a faster turnover rate.

12.4.15 Further to this, the proposed tandem car parking arrangement will further undermine onsite parking and is not expected to provide efficient, and convenient access given that they will mostly be used by hotel guests who will not be able to co-ordinate the shuffling of cars for different users. Unless a concierge is proposed to take charge of the proposed allocation and management of the parking arrangement it is unknown how this would be resolved. A such the tandem spaces, cannot at this time be recommended for support.

12.4.16 Whilst there is some discussion relating to drop offs and pickups from ride share services and taxis in the provided traffic report this is based on the location in North Melbourne, which is in close proximity to two tram lines, and a much wider array of public transport options than the subject site. Effectively the assessment above states that of the 191 clients entering or leaving the premises 118 were on foot, 23 used ride share services, and 38 were via a private (or hired) vehicle.

12.4.17 In summary, whilst the number of vehicle parking space provided is supported by Council delegates, concerns are still raised with the tandem configuration of the car parking facilities without the support of Parking Management Plan, and the utilisation of the no standing zone on City Road for pickup and drop offs without clear signage and consent from the relevant authority and will form part of our recommendation to Council.

12.4.18 As per the internal referral comments set out earlier in this report, the following design issues are raised:

Crossover/vehicle access to Boundary Road

12.4.19 There is an issue in terms of pedestrian sightlines where laneway connects with Boundary Road due to existing high structures (fences and walls) on either side, given the increase in traffic movements, concerns are raised with conflicts.

Bicycle Facilitates

12.4.20 See comments at Section 12.6 of this report.

Other

12.4.21 The laneway appears to have no-street lighting which would cause night-time visibility concerns. The application, at very least, should provide some lighting attached to the building baffled as to not impact adjacent properties.

12.4.22 The laneway between Boundary Street and the subject site is in poor condition and unsuitable for likely traffic volumes. Therefore, a condition should be included requiring the upgrade, design and construction this section of the laneway in accordance with relevant Council’s Standards/ Specifications for bluestone laneways. Given the bluestone laneways are an important characteristic of the area its retention would be preferred is possible.

12.5 Motorcycle Parking

12.5.1 Developments with more than 50 dwelling - Provision of 1 space per 50 dwelling.

12.5.2 The development is for an 85 room residential hotel (not classed as dwellings) therefore motorcycle parking is not required, even though five are proposed.

12.6 Bicycle facilities

12.6.1 Clause 52.34 of the Planning Scheme sets out different bicycle parking requirements to those specified at Clause 4.2 of Schedule 1 to the Capital City Zone.

12.6.2 Neither Clause 4.2 of the Schedule to the Capital City Zone or Clause 52.34 provides guidance as to whether either clause supersedes the other or the clauses should be read in conjunction with one another.

12.6.3 For this assessment, officers have elected to:

· Use both the bicycle parking rates specified at Clause 4.2 of the Schedule to the Capital City Zone because they are the most recent addition to the planning scheme and because the relate specifically to the Fishermans Bend Urban Renewal Area; and

· Use the bicycle spaces, shower and change room requirements at Clause 52.34-5 and the Design of bicycle spaces and Bicycle signage requirements at Clauses 52.34-6 and 52.34-7 because Clause 4.2 of the Schedule to the Capital City Zone does not set out alternative requirements for these matters.

12.6.4 An assessment of the bicycle facilities for the proposal is as follows:

Dual assessment of Bicycle Facilities
Bicycle Facility	Rate	Requirement	Proposed
Bicycle Facility	Table 2 of Section 4.2 of Schedule 1 to the Capital City Zone	Requirement	Proposed
Bicycle Parking	· Developments of more than 50 dwellings 1 space per dwelling · 1 visitor space for every 10 dwellings.	N/A	N/A
Bicycle Parking	Use listed in Table 1 of Clause 52.34	Requirement	Proposed
Bicycle Parking	Retail premises: · 1 employee space to each 300m² of leasable floor area and · 1 visitor / shopper space to each 500m²of leasable floor area Residential Hotel (Residential building other than specified in this table) · Resident - In developments of four or more storeys, 1 to each 10 lodging rooms, · Visitor - In developments of four or more storeys, 1 to each 10 lodging rooms.	Retail premises: 170m² · 1 employee space required Residential Hotel (Residential building other than specified in this table) · Resident = 85/10 = 8.5 = 9 spaces. · Visitor = 85/10 = 8.5 = 9 spaces. Total: 19 spaces	Retail and office bicycle parking spaces: 20 spaces within the rear car park.
Showers:	If 5 or more employee bicycle spaces are required, 1 employee/resident shower for the first 5 employee bicycle spaces, plus 1 to each 10 employee bicycle spaces thereafter.	1 employee showers are required	1 **(should be noted all private rooms have showers)
Change rooms:	1 employee/resident change room or direct access to a communal change room to each shower. The change room may be a combined shower and change room.	1 employee change rooms are required or one with direct access.	1 change rooms with direct access from shower facilities.

12.6.5 The plans show details of bicycle facilities required by Clause 52.34-5.

12.6.6 The plans do not show details, including dimensions, of the design of bicycle spaces or distinguish between visitor and staff bicycle parking.

12.6.7 The bicycle parking spaces at ground floor level would have reasonable accessibility and convenience.

12.6.8 It is recommended the Applicant consider design guidelines outlined in Clause 52.34, including:

· Recommend removal/widening of doorway and provide a ramp to access the rear car park from the main lobby.

· Plans need to clearly show bike rack spacing and aisle width, and which racks/areas are visitor/resident/staff spaces.

12.6.9 The above matters need to be provided for by conditions of any Incorporated Document that may be approved for the proposal.

12.6.10 The ground floor stairs could alternatively be modified to include bike tracks to both sides.

12.7 Waste Management

12.7.1 The Waste Management Plan (WMP) proposes:

· A private collection service will collect all waste streams from the property twice weekly, with the collection truck to be parked on Boundary Street.

· Building Management is responsible for all aspects of waste management including access for the waste contractor to enter the site and bin store on the days of collection.

· Waste shall be stored within the development, adjacent to the loading bay to the rear of the building (hidden from external view).

· The WMP refers to the follow collection summary:

Waste Facilities
Waste type	Bin type	Frequency of collections
General Rubbish	4 x 1,100L	2 times weekly
Co-mingled Recycling	4 x 1,100L	2 times weekly
Food	1 x 1,100L	2 times weekly
Glass	1 x 1,100L	2 times weekly

· A mechanical ventilation system for the bin storage area must not cause a public health nuisance (noise and odour generation) is recommended to comply with EPA requirements and in accordance with the ventilation requirements of the Building Code of Australia and AS 1668.2.

· The WMP plan provides a Bin store design assessment detailing required changes / points of clarification such as dimensions of roller door and doorway width, internal instructional signage.

12.7.2 Any Incorporated Document for the Amendment should include a condition requiring detailed plans and an updated Waste Management Report to be prepared and approved by Council.

12.7.3 Whilst the waste management plan is generally supported, Council officers will request greater detail regarding waste systems including provision of an electronic waste (e-waste) recycling bin / skip, and noise reduction needs to be considered in the waste management plan in accordance with Council Local Law No.1 for industrial, trade, and commercial given the proximity of residential buildings.

12.8 Loading

12.8.1 The Waste Management Plan states that all four different type of waste collection truck types would park on Boundary Street and then transfer the bins to and from the site via a cart.

12.8.2 Council officers have identified the following concerns with the proposal:

There is potential for vehicular and pedestrian conflict with the quantity and frequency of waste collection and loading vehicles propping on Boundary Street. This is aggravated by the time to relocate the bins down the uneven bluestone laneway.

The following matters would need to be resolved to facilitate on-site waste collection and loading:

· an onsite collection via 6.4m rear mini loader as per swept-paths in the traffic report. The car park at the loading point needs to have appropriate ceiling height to facilitate rear mini loader access and onsite garbage collection (i.e. lift the bins).

· It is noted that when a loading vehicle is parked in the loading bay, access to/from proposed motorcycle parking spaces and bicycle spaces are problematic. Consideration needs to be given to re-design (or relocate) the proposed bicycle parking spaces at the rear and deletion of the motorcycle parking altogether as there is no requirement under the scheme for motorcycle parking.

· Concerns are raised with the minimal clearance of the roller door at 2.7 metre provided for the access to the loading bay facilities, especially given they will likely have to back onto the laneway in order to lift the bins.

· To allow for improved access to the loading bay it is recommended that the motorcycle parking around the bay be removed, and the entire bay widened.

· Given the impact of the SBO2 floodplain further consideration of the floor to ceiling heights relative to the require flood level need to be considered.

· Given the above concerns it is recommended that the following conditions be added as a ground for support with regard to the loading bay access:

- That the loading bay be redesigned to accommodate access by a Small Rigid Vehicle and be in-line with the requirements of AS2890.2.

- The motorcycle parking surrounding the loading bay be removed from the plans.

- The loading bay widened to a minimum width of 4 metres.

- The garage door to the loading bay be removed or increase to a height of at least 3.3 metres.

- Consequential amendment to the floor to ceiling height to accommodate vertical clearances, with no overall increase to the overall building height.

12.8.3 Noting the size of the retail component delivery of goods, most other commercial deliveries will likely be undertaken by smaller trucks or vans that can access the loading bay. It is recommended conditions requiring onsite loading and waste collection be included on any approval document for the site.

12.9 Flooding / Street Interface

12.9.1 The subject site is in a Special Building Overlay and is also in an area identified by recent Melbourne Water mapping as susceptible to flooding, including from sea level rise. The common building design response to this matter is to raise floor levels rather than rely on mechanical solutions or other innovations.

12.9.2 The City Road footpath is 2.37AHD and a minimum of 3.0 AHD is required to satisfy Melbourne Water’s requirements. The ground floor layout details a 1:14 ramp from street level to the foyer and lift core, providing a universally accessible outcome for future users. The finished floor level of the café is detailed on the sections to be at 3.0 AHD and accessed by steps to the City Road café entrance.

12.9.3 Double doors to the café, accessed from the ramp, is not considered to be a feasible or DDA compliant access unless a landing area is introduced. It is recommended the door adjacent to the change room / lockers should be updated to ensure ease of accessible to the café. Such details should be required as a condition of any approval.

12.9.4 Council’s Urban Designer, and Development engineers have noted that an 8m deep transition zone via a ramp into the main lobby from the footpath is successful in providing activation to footpath whilst meeting the minimum 3 metre AHD floor level required further into the building.

12.9.5 The proposed revision to the architectural plans and the proposed use is generally supported from an Urban Design standpoint with key recommendations below.

· Public circulation between the foyer and the car park requires resolution with respect to the legibility into the rear entrance from the laneway across the motorcycle and loading facilities.

· Whilst the development proposed gazing along the majority of the façade further information is required on glazing type and openings in the façade to ensure better transparency and visual interest.

· The proposed upper-level street facade is predominantly glazed, which is not a successful response to its context (such as heritage neighbours) and does not align with precedent images provided. More solid elements and depth of facade is therefore recommended.

12.9.6 It is considered that the above amendments, subject to being determined as an acceptable design response by Melbourne Water should be included as a condition of any Incorporated Document.

12.10 Sustainable Design

12.10.1 The Sustainable Management Plan (SMP) has been reviewed by Council’s Environmental Sustainability Officers, and generally has their support except for the internal light amenity.

12.10.2 Natural daylight to the bedrooms facing light courts will be poor, as demonstrated in Appendix A: Preliminary Daylight Analysis of the SMP. It shows that 27 of the bedrooms would receive very low levels of natural daylight. This is a bad outcome for occupant comfort and for energy use as lighting will need to be turned on during daylight hours.

12.10.3 Whilst low energy lighting can be utilised to some extent to offset the minimal natural light the SMP states (pg. 10) that “every effort” will be made to minimise energy consumption for internal lighting. Details of how must be provided, such as use of LED lighting and timers/ motion sensors etc in order for the lack of natural lighting to be supported.

12.10.4 It is recommended that a better outcome for the site, would be to introduce a layout with larger, more diverse hotel rooms that were not reliant on lightwells for anything, but a secondary light source.

12.10.5 The form of the privacy screening implemented in the lightwells, also reduces light penetration into the spaces, and further consideration on how this could be improved is required.

12.11 Environmental Audit

12.11.1 An environmental audit has not been undertaken for the land.

12.11.2 Pursuant to Clause 45.03-1 of the EAO, before a sensitive use (residential use, childcare centre, pre-school centre, primary school, secondary school or children's playground) commences or before the construction or carrying out of buildings and works in association with a sensitive use commences:

· A preliminary risk screen assessment statement in accordance with the Environment Protection Act 2017 must be issued stating that an environmental audit is not required for the use or the proposed use; or

· An environmental audit statement under Part 8.3 of the Environment Protection Act 2017 must be issued stating that the land is suitable for the use or proposed use.

12.11.3 Whilst the Preliminary Site Investigation Report by ATMA Environmental states: “The site is subject to an Environmental Audit Overlay (EAO) which requires an environmental audit be obtained before a sensitive use (e.g. residential) commences. The proposed site use (hotel) is not, however, a sensitive use”.

12.11.4 The use is classified as sensitive site given it is classified as a residential building / accommodation therefore compliance with the above requirements of the Environment Protection Act is required to be satisfied via a condition of any Incorporated Document.

12.12 Infrastructure Contribution Overlay (ICO1)

12.12.1 Amendments VC146 (15 May 2018) and GC81 (05 October 2018) introduced the Infrastructure Contributions Overlay and Schedule 1 to the ICO respectively.

12.12.2 Pursuant to Clause 45.11-2, a permit must not be granted to subdivide land, construct a building or construct or carry out works until an Infrastructure Contributions Plan (ICP) has been incorporated into the Planning Scheme.

12.12.3 The application for a Planning Scheme Amendment allows assessment and approval of applications in the interim before an ICP has been incorporated into the Scheme.

12.12.4 Pursuant to the FBSAC Terms of Reference (Paragraph 20), the Advisory Committee is directed not to consider submissions and evidence in relation to the application or operation of the Infrastructure Contributions Overlay.

12.13 Aboriginal Cultural Heritage

12.13.1 All of the land is in an 'area of cultural heritage sensitivity' as defined under the Aboriginal Heritage Regulations 2018. This includes registered Aboriginal cultural heritage places and land form types that are generally regarded as more likely to contain Aboriginal cultural heritage.

12.13.2 Under the Aboriginal Heritage Regulations 2018, ‘areas of cultural heritage sensitivity' are one part of a two-part trigger which require a 'cultural heritage management plan' be prepared where a listed 'high impact activity' is proposed.

12.13.3 If a significant land use change is proposed (for example, a subdivision into 3 or more lots), a cultural heritage management plan may be triggered. One or two dwellings, works ancillary to a dwelling, services to a dwelling, alteration of buildings and minor works are examples of works exempt from this requirement.

12.13.4 Under the Aboriginal Heritage Act 2006, where a cultural heritage management plan is required, statutory authorisations cannot be issued unless the cultural heritage management plan has been approved for the activity.

12.13.5 The Planning and Environment Act 1987 does not define the amendment of a planning scheme as a “statutory authorisation”, prior to which a Cultural Heritage Management Plan or relevant exemption must be resolved. Rather, these requirements must be met before the start of any works on site.

12.13.6 As a Cultural Heritage Management Plan or relevant exemption has not been provided a condition will need to be added to any Incorporated Document that this must be provided prior to works commencing.

13. COVENANTS

13.1 The applicant has completed a restrictive covenant declaration form declaring that there is no restrictive covenant on the titles for the subject site known as Lot 2 of Plan of Subdivision 004323 (Parent Title Volume 02921 Folio 029 and Volume 02921 Folio 709).

14. OFFICER DIRECT OR INDIRECT INTEREST

14.1 No officers involved in the preparation of this report have any direct or indirect interest in the matter.

15. OPTIONS

15.1 Support the Planning Scheme Amendment as proposed.

15.2 Support the Planning Scheme Amendment subject to changes or additional conditions within the Incorporated Document for the amendment.

15.3 Refuse - on key issues

16. CONCLUSION

16.1 A Planning Scheme Amendment application is required to introduce a site-specific control to facilitate the demolition of the existing building, use and development of the land for Accommodation (Residential hotel) and Retail premises (Café).

16.2 A planning permit cannot be granted until an Infrastructure Contributions Plan is approved, or an alternative infrastructure contributions mechanism is implemented.

16.3 It is recommended that Council resolve that a letter be sent to the Department of Transport and Planning advising that the Council does not support the application for an amendment under Section 20(4) of the Planning and Environment Act 1987 to prepare, adopt and approve draft Planning Scheme Amendment C217port subject to the Concerns in the Recommendation.

ATTACHMENTS

1. Site Location Plan⇩

2. Architectural Plans⇩

3. Urban Context Report⇩

4. Terms of Reference Fishermans Bend Standing Advisory Committee⇩

Meeting of the Port Phillip City Council

17 April 2024

12.2

Proposed Fitzroy Street Special Rate and Charge Declaration Report

Executive Member:

Brian Tee, General Manager, City Growth and Development

PREPARED BY:

Susie Filleti, Business Engagement Coordinator

James Gullan, Head of Advocacy, Economic Development and Partnerships

1. PURPOSE

1.1 To determine whether Council supports the declaration of the Fitzroy Street Special Rate and Charge (Special Rate) for 2024 – 2029 period.

2. EXECUTIVE Summary

2.1 The Fitzroy Street Business Association (Association) have formally requested that Council renew the proposed Special Rate for a five-year period.

2.2 The proposed Special Rate would commence on 1 July 2024 ending on 30 June 2029.

2.3 Its purpose is for marketing, promotion, business development and centre management of the specified Activity Centre.

2.4 In accordance with sections 163, 163A, 163B and 223 of the Local Government Act 1989 (Act), Council considered all submissions and objections from affected property owners and business operators at its ordinary meeting held on 7 February 2024. All written and verbal submissions were considered at this meeting.

2.5 Following consideration of the submissions and objections received Council needs to determine a final position on the proposed Special Rate.

2.6 Options - After considering the submissions and objections in relation to the proposed Special Rate, Council has the following Options:

· Option 1 - Council considers all submissions and objections received in relation to the Special Rate in accordance with the Act and information provided by Council Officers. Council decides that there are insufficient objections (less than 51 percent) to abandon the Special Rate and proceeds to declare the Special Rate commencing 1 July 2024.

· Option 2 - Council after considering all submissions and objections received in relation to the Special Rate in accordance with the Act decides to abandon the proposed Special Rate and does not declare a Special Rate for Fitzroy Street.

3. RECOMMENDATION

That Council:

3.1 Having considered all submissions received and taken account of all objections lodged and complied with the requirements of sections 163, 163A, 163B and 223 of the Local Government Act 1989 (Act), and otherwise according to law, hereby declares the Fitzroy Street Special Rate and Charge under section 163(1) of the Act for the sole purpose of marketing, promotion, business development of the Fitzroy Street Business Precinct as detailed in the attached draft Declaration of Special Rate and Charge (Attachment 1).

3.2 Authorises the Fitzroy Street Business Association (Association) to administer the proceeds of the Special Rate on the express condition that the Association enters into a funding agreement with Council for the period of the Special Rate and Charge.

3.3 Authorises Council’s CEO, or delegate, for the purposes of paragraph 3.2 of this resolution, to prepare the funding agreement between Council and the Association by which administrative arrangements in relation to the Special Rate and Charge are confirmed, such agreement being to ensure that at all times, and as a precondition to the payment of any funds by Council to the Association, Council is, and remains legally responsible for approving, directing and controlling the expenditure of the proceeds of the Special Rate and Charge in accordance with its obligations under the Act to do so, and such funding agreement to be submitted to Council for signing.

3.4 Gives notice to all owners and occupiers of properties included in the Special Rate and Charge and all persons who have lodged a submission and/or objection of the decision of Council to declare and levy the Special Rate and Charge commencing on 1 July 2024, and the reasons for the decision.

3.4.1 For the purposes of paragraph 3.4 of this resolution, the reasons for the decision of Council to declare the Special Rate and Charge are that:

1. there were 5.94 percent valid objections to the Special Rate and Charge, and it is otherwise considered that there is a broad level of support for the Special Rate and Charge from all property owners and occupiers;

2. Council considers that it is acting in accordance with the functions and powers conferred on it under the Act, having regard to its role, purpose and objectives under the Act, particularly in relation to the encouragement of commerce, retail activity and employment opportunities in and around the Special Rate and Charge area;

3. all persons who are liable or required to pay the Special Rate and Charge and the properties respectively owned or occupied by them will receive a special benefit in the form of an enhancement or maintenance in land values and /or a maintenance or enhancement in the use, occupation and enjoyment of the properties; and

4. the basis of distribution of the Special Rate and Charge amongst those persons who are liable or required to pay the Special Rate and Charge is considered to be fair and reasonable.

3.5 Advises the Association of the matters specified in paragraphs 3.1, 3.2 and 3.3 of this resolution.

3.6 Notes the properties that are included in the Special Rate and Charge area will be subject to general re-valuations and supplementary valuations on the same cycle as the City of Port Phillip general rates and charges.

4. KEY POINTS/ISSUES

BACKGROUND

4.1 Special Rate declarations are a statutory process governed by Part 8 of the Local Government Act 1989 (Act). Despite the enactment of the Local Government Act 2020, the Special Rates provisions of the Act are still in force. In declaring a Special Rate, Council must consider that:

4.1.1 the proposal relates to the performance of a function authorised under Section 163 of the Act;

4.1.2 there will be a special benefit to those persons liable to pay the Special Rate levy; and

4.1.3 there is a reasonable distribution of the rate amongst those persons liable to pay the Special Rate levy.

4.2 On 1 September 2023, Council received a letter from the Association requesting that Council begin the statutory process to introduce the Special Rate for five years, from 1 July 2024 to 30 June 2029.

4.3 In September and October 2023, the Association visited all open businesses in the precinct and undertook a business poll to gauge support for renewing the Special Rate, given the difficult economic climate. The Association received signed support from 116 out of the 179 properties currently occupied, open and available for comment for the Special Rate, which represented 65 percent.

4.4 The proposed new Special Rate is for a five-year period (2024 – 2029) and includes 219 properties. The proposed Boundary Map is attached (Attachment 2).

4.5 The proposed 2024 – 2029 Special Rate is modelled to raise up to $200,000 per annum in each of the financial years from 2024-2025 to 2028-2029.

4.6 At the ordinary meeting of Council held on 15 November 2023 Council resolved to commence the statutory process in November 2023 under the Act to introduce a Special Rate and for the properties within the defined Fitzroy Street Business Precinct. Such Special Rate is to raise up to $200,000 per annum in each of the financial years from 2024-2025 to 2028-2029.

4.7 In accordance with Council’s statutory obligations under sections 163(1A) and 163B(3) of the Act, a Public Notice was published in The Age on the 20 November 2023, outlining the details of the proposed declaration of Special Rate. This Public Notice commenced the statutory consultation process. The process concluded at 5pm on 18 December 2023.

4.8 On 17 November 2023, Council sent individual letters to all affected property owners and occupiers within the proposed Fitzroy Street boundary, advising of the Intention to Declare the Special Rate, the commencement of the statutory process including a copy of the Public Notice and an estimation of the levy based on 2023 Net Asset Value (NAV) valuations that would be applied to the property.

4.9 Within the statutory consultation period, between 20 November and 18 December 2023, Council received:

· seven submissions from business and property owners representing seven properties in support of the Special Rate; and

· 13 valid and one invalid objections from nine property and business owners representing 14 properties objecting to the proposed Special Rate.

4.10 The total number of valid objections received equates to 5.94 percent of the total proposed rateable properties (219).

4.11 Section 163B(6) of the Act states that Council cannot make a declaration of special rate if it receives objections from a majority of the rateable properties in respect of which the special rate would be imposed (that being 51 percent). In this case, Council has not received a majority of objections to the proposed Special Rate.

4.12 Council must consider all submissions and objections received in relation to the Special Rate in accordance with the Act prior to making a decision regarding the declaration of the proposed Fitzroy Street Special Rate and Charge.

4.13 At the ordinary Meeting of Council held on 7 February 2024, in accordance with the statutory process, Council considered all submissions and objections from affected property owners and business operators. All submissions were considered at this meeting. A vote to move to determine a final decision at its ordinary meeting on 17 April 2024 was taken and the Motion was carried unanimously.

KEYPOINTS:

4.14 The City of Port Phillip currently has four Special Rate schemes in operation – Fitzroy Street, Port Melbourne, Acland Street Village and Carlisle Street. All Port Phillip schemes incorporate the collection of a levy from commercial properties within a defined geographic area, for the sole purpose of marketing, promotion and business development of the specified activity centre.

4.15 Council does not have a threshold of support required to declare a special rate. It has chosen to include targets that must be met to support renewal in certain funding agreements, and this is something it can consider for Fitzroy St if it wishes to.

4.16 All funds collected are distributed to the relevant incorporated Business Association under a funding agreement with Council.

4.17 The proposed new Special Rate is for a five-year period (2024 – 2029) and includes 219 properties.

4.18 If redevelopments occur within the proposed Special Rate boundary any new eligible properties that have not previously been levied will be added to the Special Rate. Any property that changes from commercial, retail, leisure, tourism or light industrial to residential use will be removed from the Special Rate. Amendments to the Special Rate will occur from the date the supplementary valuation takes effect.

4.19 Properties exempt from paying the Special Rate levy include:

· all residential properties; and

· non-rateable properties.

4.20 With the completion and review of Special Rate modelling, the Association requested that Council declare a Special Rate of up to $200,000 per annum in each of the financial years from 2024-2025 to 2028-2029.

4.21 To distribute the special rate and charge across the commercial properties within the Fitzroy Street precinct boundary the current four benefit areas will remain – primary, secondary, tertiary and quaternary. Details of the benefit areas and Scheme boundary are specified in the Proposed Declaration of a Special Rate and Charge (Attachment 1).

4.22 Properties that are used, or reasonably capable of being used, for retail, commercial, leisure, tourism, entertainment, light industrial or professional purposes that fall into the below address ranges are included proposed Scheme boundary:

· 2 – 6 Acland Street (inclusive);

· 11 and 12 Esplanade;

· 1 – 203 Fitzroy Street and 8 – 64 Fitzroy Street (inclusive);

· 9 – 19 Grey Street and 4 – 24 Grey Street (inclusive);

· 1 George Lane;

· 1 St Kilda Road; and

· In the opinion of Council receive a special benefit from the Special Rate and Charge.

4.23 The rates in the dollar applicable to the Special Rates in all the benefit levels will be determined at the beginning of each financial year to achieve a Special Rate of up to $200,000 per annum.

4.24 The rates in the dollar applicable to each benefit area for the purposes of assessing and levying the special rate and charge will be determined having regard to the Net Annual Value (NAV) of all properties within each benefit area at the beginning of each financial year to raise a total of up to $200,000 per annum.

4.25 As FY2024-2025 NAV valuations are not yet available at the time of this Report, the below shows rates in the dollar, based on the 2023-2024 NAV valuations, that would have been applied to collect the special rates and charges totalling up to $200,000 per annum:

· Primary benefit rate – 0.01129

· Secondary benefit rate – 0.00883

· Tertiary benefit rate – 0.00652

· Quaternary benefit rate – 0.00490

4.26 The actual special rates to be applied in 2024-2025, and in each subsequent year of the Special Rate Period, will be determined having regard to reassessed NAV figures prepared annually by Valuer-General Victoria.

4.27 In addition to the rate in the dollar being adjusted each financial year, maximum and minimum special charges will also apply. For the 2024-25 rating year, the following maximum and minimum special charges will apply:

· Primary benefit rate – maximum charge of $3,260 and a minimum charge of $878 per year.

· Secondary benefit rate – maximum $2,712 and a minimum charge of $691 per year.

· Tertiary benefit rate – maximum charge of $2,173 and a minimum charge of $523 per year.

· Quaternary benefit rate – maximum charge of $1,686 and a minimum charge of $452 per year.

4.28 The maximum and minimum special charges will be adjusted at the beginning of each financial year during the operation of the Scheme, having regard to:

· any change to the special rate in each of the benefit areas (which, as above, will determined having regard to the movement of NAV to ensure that $200,000 will be collected in that year);

· the inclusion or removal of any properties from the Scheme; and

· any change in the number of properties that will pay a special charge (as opposed

· to a special rate), having regard to the changed special rates in each benefit area,

· as above.

4.29 Council will provide the Association with the collected levy every six months, on receipt of an accepted Activity Report and valid tax invoice. Prior to the Association issuing a valid tax invoice, Council will confirm the total levy collected for the six-month period, which will be no more than $100,000 to include on the tax invoice. Should the collected levy be less than the expected levy, Council will not supplement payments to cover the balance; Council will only issue funds received.

4.30 The Association has developed its Business Plan for the proposed 2024 – 2029 Special Rate as well as a Budget and Marketing Plan for 2024 – 2025 (Attachment 3) and will form part of the new funding agreement with Council.

4.31 The Special Rate will be for the sole purpose of marketing, promotion, business development and centre management of the specified Activity Centre. It is considered that the value of the properties included in the Special Rate, their desirability as a letting proposition and their general amenity could be enhanced by the activities generated from the Special Rate funds.

5. CONSULTATION AND STAKEHOLDERS

5.1 A public notice was published in the Age and on Council’s website on the 20 November 2023, outlining the details of the proposed declaration of Special Rate. This Public Notice commenced the statutory consultation process. The process concluded at 5pm on 18 December 2023.

5.2 On 17 November 2023, Council sent separate letters to all affected property owners and occupiers within the proposed Fitzroy Street boundary, advising of the Intention to Declare the Special Rate, the commencement of the statutory process including a copy of the Public Notice and an estimation of the levy based on 2023 NAV valuations that would be applied to the property.

5.3 Council acknowledged receipt of all submissions and objections and provided details of the Council Meeting at which those persons could speak to their submission.

5.4 At the ordinary Meeting of Council held on 7 February 2024, in accordance with statutory process, Council considered all objections and submissions from affected property owners and business operators. All objections and submissions were considered at this meeting. A vote to move to determine a final decision at its ordinary meeting on 17 April 2024 was taken and the Motion was carried unanimously.

6. LEGAL AND RISK IMPLICATIONS

The risks associated with the proposal are limited by the following:

6.1 Maddocks have provided legal advice for the statutory processes associated with the request to declare a Special Rate and the objection count was independently conducted by Maddocks.

6.2 The number of valid objections received for the Special Rate does not exceed 50 percent of the total properties in accordance with Section 163B(6) of the Act.

6.3 If the Special Rate is declared, the Association will enter into a formal funding agreement with Council for the duration of the Special Rate which outlines the specific purposes for which the funds can be spent (being the purposes for which the Special Rate is declared).

6.4 Under the terms of the proposed funding agreement, the Association:

6.4.1 will be required to submit an Activity Report that includes financial reporting documentation every six months (profit and loss, balance sheet, general ledger, and marketing activity report). Special Rate monies will not be paid to the Association until all reporting is received and approved.

6.4.2 must be an incorporated entity through the life of the Special Rate and must act in accordance with the Associations Incorporation Reform Act 2012.

6.4.3 will be required to adopt their five-year Business Plan to guide expenditure of the funds (Attachment 3).

6.4.4 will be required to adopt their annual Budget and Action Plan that details how the operating budget will be spent (Attachment 3).

6.4.5 The Association will expend the monies raised by the Special Rate on behalf of Council as an administrator of the funds and at all times bound by the funding agreement with Council and under the direction of Council, and Council will reserve solely all discretions relevant to the application of the proceeds of the Special Rate. Section 164 of the Act enables Council to discontinue the Special Rate if there is any inappropriate expenditure.

6.4.6 If Council does not wish to support the Special Rate, there may be an expectation from the commercial precinct that Council will fund marketing and promotion activities for the precinct.

6.4.7 If Council proceeds with the declaration at its Ordinary Meeting on 17 April 2024, a person on whom the Special Rate is imposed then has 30 days from the date of issue of a Notice of declaration of the Special Rate to apply to VCAT for a review of a decision of Council to impose a Special Rate on that person, on limited grounds under section 185 of the Act.

6.4.8 Section 185AA of the Act provides a separate right to apply to VCAT for a declaration as to the validity of Council’s decision. An application for a declaration can be made at any time.

6.4.9 If an application is lodged at VCAT, Council would consider whether to proceed with:

· the implementation of any Special Rate; or

· providing any monies raised to the Association until the application has been heard and there is a VCAT decision on the matter.

7. FINANCIAL IMPACT

7.1 Council incurs administrative costs for the introduction of the Special Rate. These have been included in the FY2023/2024 budget.

7.2 If the Special Rate is successful, ongoing resources will be required to monitor the Special Rate. This will be funded from the operational budget and supported via existing resourcing.

7.3 Council administers the collection of the funds of the Special Rate and would distribute the funds to Association in two half-yearly instalments, subject to it completing its reporting requirements under the proposed funding agreement.

8. ENVIRONMENTAL IMPACT

8.1 A financially sustainable Association allows Council to work with Fitzroy Street businesses on sustainable best practice programs that will reduce emissions, waste and energy usage and achieve improved sustainability outcomes.

8.2 Vibrant local activity centres provide residents with the opportunity to shop locally and sustainably by walking, cycling or taking public transport to access their centre rather than driving elsewhere.

9. COMMUNITY IMPACT

9.1 Vibrant activity centres are critical to the health and development of the local community. Centres provide employment, community meeting places, resources, leisure opportunities and essential services to the community.

10. ALIGNMENT TO COUNCIL PLAN AND COUNCIL POLICY

10.1 Inclusive Strategic Direction - A City that is a place for all members of our community, where people feel supported and comfortable being themselves and expressing their identities:

· A successful business/retail precinct provides a multitude of services to the community ensuring all have access to health and wellbeing services and facilities. A community that is connected is a healthy community and business precincts provide these connectivity opportunities.

10.2 Liveable Strategic Direction - A City that is a great place to live, where our community has access to high quality public spaces, development and growth are well-managed, and it is safer and easy to connect and travel within:

· Successful business/retail precincts underpin the liveability of a high-density city, like Port Phillip and are pivotal in creating a city of diverse and distinctive neighbourhoods and public spaces.

10.3 Sustainable Strategic Direction - A City that has a sustainable future, where our environmentally aware and active community benefits from living in a bayside city that is greener, cooler, cleaner and climate resilient:

· There is opportunity for Council to work with Business Associations to educate and examine ways to ‘green’ businesses including waste reduction, energy usage, sustainable design, and use of sustainable transport.

10.4 Vibrant Strategic Direction - A City that has a flourishing economy, where our community and local businesses thrive, and we maintain and enhance our reputation as one of Melbourne’s cultural and creative hubs:

· Special Rate funds empower the business community to actively and creatively market, promote and develop their precinct to maintain vibrancy and economic viability and to provide the community with a well-resourced business precinct that provides excellent services, gathering places and employment.

10.5 Well-Governed Strategic Direction - A City that is a leading local government authority, where our community and our organisation are in a better place as a result of our collective efforts:

· Business Associations enable Council to efficiently understand business precinct needs and work with Associations in a collaborative way for the benefit of the community.

11. IMPLEMENTATION STRATEGY

11.1 TIMELINE

If Council resolves to declare the proposed Special Rate for five years, from 1 July 2024 to 30 June 2029, at its Ordinary Meeting on 17 April 2024:

11.1.1 Council advises the Association of the Council decision on 18 April 2024 and commences drafting a formal funding agreement with the Association for the duration of the Special Rate which outlines the specific purposes for which the funds can be spent.

11.1.2 Council gives ratepayers notice by the nominated postal address and the street address in the designated Special Rate area of the decision regarding the Fitzroy Street Special Rate and Charge and provides the basis on which the Special Rate will be levied.

11.1.3 A person on whom a Special Rate is imposed then has 30 days from the date of issue of the Notice of declaration of the Special Rate specified in 11.1.2 of this report to apply to VCAT for a review of a decision of Council to impose a Special Rate on that person, on limited grounds under section 185 of the Act.

11.1.4 Section 185AA of the Act provides a separate right to apply to VCAT for a declaration as to the validity of Council’s decision. An application for a declaration can be made at any time.

If an application is lodged at VCAT, Council would consider whether to:

11.1.5 proceed with the implementation of any Special Rate; and

11.1.6 provide any monies raised to the Association;

until the application has been heard and there is a VCAT decision on the matter.

11.1.7 Council will advise the Association of its decision.

If no application is made to VCAT, Council will commence the Fitzroy Street Special Rate and Charge on 1 July 2024.

11.1.8 Affected rate payers will receive their levy notification to make payment via their Council rates notice in August 2024.

If Council resolves not to declare the proposed Special Rate at its Ordinary Council Meeting on 17 April 2024:

11.1.9 Council will advise the Association and all affected rate payers in writing of this decision and the proposed Special Rate will not proceed.

11.2 COMMUNICATION

11.2.1 Council advises the Association of Council’s decision regarding the Special Rate.

11.2.2 Council advises, by letter, all the eligible ratepayers by their nominated postal addresses and the street addresses in the designated Special Rate Area of the decision regarding the Special Rate following the Ordinary Council Meeting on 17 April 2024.

12. OFFICER material OR general INTEREST

12.1 No officers involved in the preparation of this report have any material or general interest in the matter.

ATTACHMENTS

1. Fitzroy Street Special Rate and Charge Proposed Declaration⇩

2. Proposed Fitzroy Street Precinct Boundary⇩

3. Fitzroy Street Business Association Business Plan 2024-2029⇩

Meeting of the Port Phillip City Council

17 April 2024

12.3

Proposed Acland Street Village Special Rate and Charge Declaration Report

Executive Member:

Brian Tee, General Manager, City Growth and Development

PREPARED BY:

Susie Filleti, Business Engagement Coordinator

James Gullan, Head of Advocacy, Economic Development and Partnerships

1. PURPOSE

1.1 To determine whether Council supports the declaration of the Acland Street Village Special Rate and Charge (Special Rate) for 2024 – 2029 period.

2. EXECUTIVE Summary

2.1 The Acland Street Village Business Association (Association) have formally requested that Council renew the proposed Special Rate for a five-year period.

2.2 The proposed Special Rate would commence on 1 July 2024 ending on 30 June 2029.

2.3 Its purpose is for marketing, promotion, business development and centre management of the specified Activity Centre.

2.5 Following consideration of the submissions and objections received Council needs to determine a final position on the proposed Special Rate.

2.6 Options - After considering the submissions and objections in relation to the proposed Special Rate, Council has the following Options:

3. RECOMMENDATION

That Council:

3.1 Having considered all submissions received and taken account of all objections lodged and complied with the requirements of sections 163, 163A, 163B and 223 of the Local Government Act 1989 (Act), and otherwise according to law, hereby declares the Acland Street Village Special Rate and Charge under section 163(1) of the Act for the sole purpose of marketing, promotion, business development of the Acland Street Village Business Precinct as detailed in the attached draft Declaration of Special Rate and Charge (Attachment 1).

3.2 Authorises the Acland Street Village Business Association (Association) to administer the proceeds of the Special Rate on the express condition that the Association enters into a funding agreement with Council for the period of the Special Rate and Charge.

3.3 Authorises the CEO, or their delegate, for the purposes of paragraph 3.2 of this resolution, to prepare the funding agreement between Council and the Association by which administrative arrangements in relation to the Special Rate and Charge are confirmed, such agreement being to ensure that at all times, and as a precondition to the payment of any funds by Council to the Association, Council is, and remains legally responsible for approving, directing and controlling the expenditure of the proceeds of the Special Rate and Charge in accordance with its obligations under the Act to do so, and such funding agreement to be submitted to Council for signing.

3.4.1 For the purposes of paragraph 3.4 of this resolution, the reasons for the decision of Council to declare the Special Rate and Charge are that:

1. there were 5.74 percent valid objections to the Special Rate and Charge, and it is otherwise considered that there is a broad level of support for the Special Rate and Charge from all property owners and occupiers;

4. the basis of distribution of the Special Rate and Charge amongst those persons who are liable or required to pay the Special Rate and Charge is considered to be fair and reasonable.

3.5 Advises the Association of the matters specified in paragraphs 3.1, 3.2 and 3.3 of this resolution.

4. KEY POINTS/ISSUES

BACKGROUND

4.1.1 the proposal relates to the performance of a function authorised under Section 163 of the Act;

4.1.2 there will be a special benefit to those persons liable to pay the Special Rate levy; and

4.1.3 there is a reasonable distribution of the rate amongst those persons liable to pay the Special Rate levy.

4.3 In September and October 2023, the Association visited all open businesses in the precinct and undertook a business poll to gauge support for renewing the Special Rate, given the difficult economic climate. The Association received signed support from 164 out of the 238 properties currently occupied, open and available for comment for the Special Rate, which represented 69 percent.

4.4 The proposed new Special Rate is for a five-year period (2024 – 2029) and includes 276 properties. The proposed Boundary Map is attached (Attachment 2).

4.5 The proposed 2024 – 2029 Special Rate is modelled to raise up to $187,320 per annum in each of the financial years from 2024-2025 to 2028-2029.

4.6 At the ordinary meeting of Council held on 15 November 2023 Council resolved to commence the statutory process in November 2023 under the Act to introduce a Special Rate and for the properties within the defined Acland Street Village Business Precinct. Such Special Rate is to raise up to $187,320 per annum in each of the financial years from 2024-2025 to 2028-2029.

4.8 On 17 November 2023, Council sent individual letters to all affected property owners and occupiers within the proposed Acland Street Village boundary, advising of the Intention to Declare the Special Rate, the commencement of the statutory process including a copy of the Public Notice and an estimation of the levy based on 2023 Net Asset Value (NAV) valuations that would be applied to the property.

4.9 Within the statutory consultation period, between 20 November and 18 December 2023, Council received:

· seven submissions from business and property owners representing seven properties in support of the Special Rate;

· 11 valid and three invalid objections from 14 property and business owners representing 20 properties objecting to the proposed Special Rate; and

· One submission seeking a review of the benefit level allocated to the property.

4.10 The total number of valid objections received equates to 5.74 percent of the total proposed rateable properties.

KEYPOINTS:

4.14 The City of Port Phillip currently has four Special Rate schemes in operation – Acland Street Village, Port Melbourne, Fitzroy Street and Carlisle Street. All Port Phillip schemes incorporate the collection of a levy from commercial properties within a defined geographic area, for the sole purpose of marketing, promotion and business development of the specified activity centre.

4.16 All funds collected are distributed to the relevant incorporated Business Association under a funding agreement with Council.

4.17 Following the Council Meeting on 7 February 2024, 20 upper properties at 14-16 Esplanade, St Kilda have been removed from the proposed Special Rate in response to a thorough review following several objections. Therefore, the proposed new Special Rate remains for a five-year period (2024 – 2029), however it now includes 276 properties as a revised total number of properties in the Special Rate boundary.

4.18 The Association was notified of the removal of the 20 upper properties at 14-16 Esplanade, St Kilda and the slight reduction in the operating budget. As there is no requirement to increase the levy, Maddocks has provided legal advice that the deviation is lawful and does not require further public consultation.

4.19 If redevelopments occur within the proposed Special Rate boundary any new eligible properties that have not previously been levied will be added to the Special Rate. Any property that changes from commercial, retail, leisure, tourism or light industrial to residential use will be removed from the Special Rate. Amendments to the Special Rate will occur from the date the supplementary valuation takes effect.

4.20 Properties exempt from paying the Special Rate levy include:

· all residential properties; and

· non-rateable properties.

4.21 With the completion and review of Special Rate modelling, the Association requested that Council declare a Special Rate of up to $187,320 per annum in each of the financial years from 2024-2025 to 2028-2029.

4.22 To distribute the special rate and charge across the commercial properties within the Acland Street Village precinct boundary the current four benefit areas will remain – primary, secondary, tertiary and quaternary. Details of the benefit areas and Scheme boundary are specified in the Proposed Declaration of a Special Rate and Charge (Attachment 1).

4.23 Properties that are used, or reasonably capable of being used, for retail, commercial, leisure, tourism, entertainment, light industrial or professional purposes that fall into the below address ranges are included proposed Scheme boundary:

· 46 – 170 and 65 – 193 Acland Street (inclusive)

· 136 – 218 and 167 – 231A Barkly Street (inclusive)

· 1 – 9 and 2 – 26 Belford Street (inclusive)

· 22 and 25 – 49 Blessington Street (inclusive)

· 7 – 31 and 2 – 32 Carlisle Street (inclusive)

· 1 – 21 and 2 – 10 Irwell Street (inclusive)

· 30 – 40 Jacka Boulevard (inclusive)

· 14 – 18 Lower Esplanade (inclusive)

· 42B and 42D Marine Parade

· 1 – 7 Shakespeare Grove (odd and even inclusive)

· 1R/14-16 Esplanade

· 18 – 32 Esplanade (inclusive); and

· In the opinion of Council receive a special benefit from the Special Rate and Charge.

4.24 The rates in the dollar applicable to the Special Rates in all the benefit levels will be determined at the beginning of each financial year to achieve a Special Rate of up to $187,320 per annum.

4.25 The rates in the dollar applicable to each benefit area for the purposes of assessing and levying the special rate and charge will be determined having regard to the Net Annual Value (NAV) of all properties within each benefit area at the beginning of each financial year to raise a total of up to $187,320 per annum.

4.26 As FY2024-2025 NAV valuations are not yet available at the time of this Report, the below shows rates in the dollar, based on the 2023-2024 NAV valuations, that would have been applied to collect the special rates and charges totalling up to $187,320 per annum:

· Primary benefit rate – 0.00604

· Secondary benefit rate – 0.00367

· Tertiary benefit rate – 0.00271

· Quaternary benefit rate – 0.00196

4.27 The actual special rates to be applied in 2024-2025, and in each subsequent year of the Special Rate Period, will be determined having regard to reassessed NAV figures prepared annually by Valuer-General Victoria.

4.28 In addition to the rate in the dollar being adjusted each financial year, maximum and minimum special charges will also apply. For the 2024-25 rating year, the following maximum and minimum special charges will apply:

· Primary benefit rate – maximum charge of $4,223 and a minimum charge of $739 per year.

· Secondary benefit rate – maximum $3,167 and a minimum charge of $570 per year.

· Tertiary benefit rate – maximum charge of $2,639 and a minimum charge of $428 per year.

· Quaternary benefit rate – maximum charge of $2,111 and a minimum charge of $369 per year.

4.29 The maximum and minimum special charges will be adjusted at the beginning of each financial year during the operation of the Scheme, having regard to:

· any change to the special rate in each of the benefit areas (which, as above, will determined having regard to the movement of NAV to ensure that $187,320 will be collected in that year);

· the inclusion or removal of any properties from the Scheme; and

· any change in the number of properties that will pay a special charge (as opposed

· to a special rate), having regard to the changed special rates in each benefit area,

· as above.

4.30 Council will provide the Association with the collected levy every six months, on receipt of an accepted Activity Report and valid tax invoice. Prior to the Association issuing a valid tax invoice, Council will confirm the total levy collected for the six-month period, which will be no more than $93,660 to include on the tax invoice. Should the collected levy be less than the expected levy, Council will not supplement payments to cover the balance; Council will only issue funds received.

4.31 The Association has developed its Business Plan for the proposed 2024 – 2029 Special Rate as well as a Budget and Marketing Plan for 2024 – 2025 (Attachment 3) and will form part of the new funding agreement with Council.

4.32 The Special Rate will be for the sole purpose of marketing, promotion, business development and centre management of the specified Activity Centre. It is considered that the value of the properties included in the Special Rate, their desirability as a letting proposition and their general amenity could be enhanced by the activities generated from the Special Rate funds.

5. CONSULTATION AND STAKEHOLDERS

5.2 On 17 November 2023, Council sent separate letters to all affected property owners and occupiers within the proposed Acland Street Village boundary, advising of the Intention to Declare the Special Rate, the commencement of the statutory process including a copy of the Public Notice and an estimation of the levy based on 2023 NAV valuations that would be applied to the property.

5.3 Council acknowledged receipt of all submissions and objections and provided details of the Council Meeting at which those persons could speak to their submission.

6. LEGAL AND RISK IMPLICATIONS

The risks associated with the proposal are limited by the following:

6.1 Maddocks have provided legal advice for the statutory processes associated with the request to declare a Special Rate and the objection count was independently conducted by Maddocks.

6.2 The number of valid objections received for the Special Rate does not exceed 50 percent of the total properties in accordance with Section 163B(6) of the Act.

6.4 Under the terms of the proposed funding agreement, the Association:

6.1.4 will be required to submit an Activity Report that includes financial reporting documentation every six months (profit and loss, balance sheet, general ledger, and marketing activity report). Special Rate monies will not be paid to the Association until all reporting is received and approved.

6.1.5 must be an incorporated entity through the life of the Special Rate and must act in accordance with the Associations Incorporation Reform Act 2012.

6.1.6 will be required to adopt their five-year Business Plan to guide expenditure of the funds (Attachment 3).

6.1.7 will be required to adopt their annual Budget and Action Plan that details how the operating budget will be spent (Attachment 3).

6.1.8 The Association will expend the monies raised by the Special Rate on behalf of Council as an administrator of the funds and at all times bound by the funding agreement with Council and under the direction of Council, and Council will reserve solely all discretions relevant to the application of the proceeds of the Special Rate. Section 164 of the Act enables Council to discontinue the Special Rate if there is any inappropriate expenditure.

6.1.9 If Council does not wish to support the Special Rate, there may be an expectation from the commercial precinct that Council will fund marketing and promotion activities for the precinct.

6.1.10 If Council proceeds with the declaration at its Ordinary Meeting on 17 April 2024, a person on whom the Special Rate is imposed then has 30 days from the date of issue of a Notice of declaration of the Special Rate to apply to VCAT for a review of a decision of Council to impose a Special Rate on that person, on limited grounds under section 185 of the Act.

6.1.11 Section 185AA of the Act provides a separate right to apply to VCAT for a declaration as to the validity of Council’s decision. An application for a declaration can be made at any time.

6.1.12 If an application is lodged at VCAT, Council would consider whether to proceed with:

· the implementation of any Special Rate; or

· providing any monies raised to the Association until the application has been heard and there is a VCAT decision on the matter.

7. FINANCIAL IMPACT

7.1 Council incurs administrative costs for the introduction of the Special Rate. These have been included in the FY2023/2024 budget.

7.2 If the Special Rate is successful, ongoing resources will be required to monitor the Special Rate. This will be funded from the operational budget and supported via existing resourcing.

8. ENVIRONMENTAL IMPACT

8.1 A financially sustainable Association allows Council to work with Acland Street Village businesses on sustainable best practice programs that will reduce emissions, waste and energy usage and achieve improved sustainability outcomes.

9. COMMUNITY IMPACT

10. ALIGNMENT TO COUNCIL PLAN AND COUNCIL POLICY

10.1 Inclusive Strategic Direction - A City that is a place for all members of our community, where people feel supported and comfortable being themselves and expressing their identities:

10.5 Well-Governed Strategic Direction - A City that is a leading local government authority, where our community and our organisation are in a better place as a result of our collective efforts:

· Business Associations enable Council to efficiently understand business precinct needs and work with Associations in a collaborative way for the benefit of the community.

11. IMPLEMENTATION STRATEGY

11.1 TIMELINE

If Council resolves to declare the proposed Special Rate for five years, from 1 July 2024 to 30 June 2029, at its Ordinary Meeting on 17 April 2024:

11.1.2 Council gives ratepayers notice by the nominated postal address and the street address in the designated Special Rate area of the decision regarding the Acland Street Village Special Rate and Charge and provides the basis on which the Special Rate will be levied.

11.1.4 Section 185AA of the Act provides a separate right to apply to VCAT for a declaration as to the validity of Council’s decision. An application for a declaration can be made at any time.

11.1.5 If an application is lodged at VCAT, Council would consider whether to:

· proceed with the implementation of any Special Rate; and

· provide any monies raised to the Association;

until the application has been heard and there is a VCAT decision on the matter.

11.1.6 Council will advise the Association of its decision.

If no application is made to VCAT, Council will commence the Acland Street Village Special Rate and Charge on 1 July 2024.

11.1.7 Affected rate payers will receive their levy notification to make payment via their Council rates notice in August 2024.

If Council resolves not to declare the proposed Special Rate at its Ordinary Council Meeting on 17 April 2024:

11.1.8 Council will advise the Association and all affected rate payers in writing of this decision and the proposed Special Rate will not proceed.

11.2 COMMUNICATION

11.2.1 Council advises the Association of Council’s decision regarding the Special Rate.

12. OFFICER material OR general INTEREST

12.1 No officers involved in the preparation of this report have any material or general interest in the matter.

ATTACHMENTS

1. Updated Acland Street Village Special Rate and Charge Proposed Declaration⇩

2. Proposed Acland Street Village Precinct Boundary⇩

3. Acland Street Village Business Association Business Plan 2024-2029⇩

Meeting of the Port Phillip City Council

17 April 2024

13.1

Draft Council Plan 2021-2031 (Year Four) and Budget 2024-25: Release for Public Consultation

Executive Member:

Lachlan Johnson, General Manager, Operations and Infrastructure

JOANNE MCNEILL, EXECUTIVE MANAGER, GOVERNANCE AND ORGANISATIONAL PERFORMANCE

PREPARED BY:

Peter Liu, Chief Financial Officer

Spyros Karamesinis, Head of Financial Business Partnering, Analysis & Compliance

Jacky Bailey, Head of Corporate Planning

1. PURPOSE

1.1 To consider release of the draft Council Plan 2021-31 updated for year four and the draft Budget 2024/25 for community consultation.

2. EXECUTIVE Summary

2.1 Council adopted the Council Plan 2021-31, incorporating Community Vision, Municipal Health & Wellbeing Plan, Revenue & Rating Plan and Budget on 23 June 2021. The Plan sets out a 10-year vision and five strategic directions for the city, with a four-year focus on the specific actions Council will undertake to work towards achieving this vision. This report presents the Council Plan 2021-31 updated for year four and the draft Budget 2024/25 for community consultation.

2.2 The Local Government Act 2020 (the Act), requires Council each year to:

2.2.1 review the Council Plan to determine whether the strategies, actions and measures require adjustment; and

2.2.2 develop an annual Budget and Financial Plan, which includes detail on the capital and operating programs.

2.3 This report also seeks authorisation for the CEO to continue to provide Council projects and services within the parameters of the adopted Council Plan and Budget 2021-31 and any decisions of Council that have updated this and to authorise the CEO to incur planning, design and community consultation expenditure on new projects proposed in the draft Budget 2024/25.

2.4 Since the adoption of the Council Plan 2021-31, Council has subsequently adopted the Enterprise Asset Management Plan, Don’t Waste It! Waste Management Strategy, and Rating Strategy, which were all endorsed on 29 June 2022. These strategies and plan have influenced subsequent budgets.

2.5 Consistent with the Council Plan and Budget parameters that were considered by Council in 2021, the proposed amendments result from strategic work undertaken during the year, better and updated information related to key budget assumptions, progress in project delivery, updated asset management information, refinement of measures and targets, changes to our strategic and operating risks .

2.6 Applying the principles and budget parameters set within the 10-Year Financial Outlook that were adopted by Council in December 2023, a balanced draft Budget 2024/25 is presented for Council’s consideration that includes provision for targeted relief to our community facing cost of living pressures and responds to the various financial risks facing Council.

2.7 That said, the ongoing rate capping deficit remains a key long-term financial challenge as highlighted in the updated 10-year Financial Plan. Key challenges include:

2.7.1 Inflation continues to trend higher than the annual rates cap set by the Minister of Local Government. Councils have been required to fund the shortfall between the annual rates cap and actual inflation. See table:

	Annual Rates Cap	Actual Rates Increase	Inflation (Melbourne)	Shortfall (Rates increase vs inflation)
2021/22	1.50%	1.50%	2.90%	(1.40%)
2022/23	1.75%	1.75%	6.10%	(4.35%)
2023/24	3.50%	2.80%	5.60%	(2.80%)
2024/25	2.75%	2.75% (proposed)	3.40% (projected)	(0.65%)

a) In 2023/24, Council also endorsed a rate increase of 2.8 per cent which was 0.7 per cent below the annual rates cap in recognition of the cost-of-living pressures faced by the community. This was funded through one-off improvements in the 2023/24 surplus including improvement in parking income, investment income and drawdown on Council reserves.

2.7.2 Within this rates capping environment, Council must also accommodate other cost pressures including:

a) an increase in the Superannuation Guarantee Charge to 11 per cent from 11.5 per cent.

b) increases above inflation to WorkCover and insurance premiums.

2.7.3 Council’s non-rate revenue is also facing pressure through changing economic conditions and policy:

a) A decline in developer open space contributions due to the increase in build to rent developments in the municipality. This impacts Council’s ability to expand and create new public open space despite a growing population.

b) It also sees existing public spaces and other assets that are high valued and utilised by existing residents and visitors to our City having to provide for much greater use.

c) A general decline in building development activity across the municipality.

2.7.4 Rising costs associated with delivering Council’s core services such as he increasing cost base of delivering Council’s long day care service coupled with changes in service utilisation with overall declining birthrates and dropping attendance momentum in part associated with a prevalence of work from home.

2.7.5 Additionally, Council on 21 February 2024 resolved to exit from the delivery of funded in home aged care services. This decision included a commitment to increase Council funding towards aged care services and connection across the City.

2.8 Despite these significant challenges, Council continues to renew and grow community assets while also maintaining the delivery and quality of Council’s core services. The key assumptions of the draft Budget 2024/25 include:

2.8.1 Minimising the increase of rates and charges in a high inflation environment with:

a) An average rate increase of 2.75 per cent, which is equivalent to the rates cap set by the Victorian Government and lower than inflation.

b) Default Waste Charge to increase by 2.72 per cent at $203.60 which is lower than inflation.

2.8.2 Ongoing targeted financial support including:

a) Increasing the Council-funded pensioner rates rebate by $10 or 4.8 per cent to $220 in 2024/25 – noting that the City of Port Phillip is one of the few councils that offer this scheme in addition to the State Government rebate.

b) Continuation of existing business support with the Economic Recovery Package until June 2025.

c) Additional $40,000 funding for greater food support within the municipality. This is to respond to the greater demand for food relief.

2.8.3 Proposed changes to Rating Strategy 2022-25 as endorsed by Council on 20 March 2024 to proceed with community consultation, including new higher differential rates for Derelict Land, Unactivated Retail Land and Vacant Land to address neglected land use that results in negative impacts to the municipality due to being under-utilised, causing safety and amenity concerns, vibrancy concerns, and not contributing to the overall purpose and objectives of the Council Plan

2.8.4 Refinement to the Waste Charge structure to achieve outcomes that are fair, efficient to administer, and simple to understand for our community. This means all separately titled car spaces and storage areas will no longer be charged waste charges from 2024/25.

2.8.5 Accommodating inflation projected at 3.4 per cent (0.65 per cent greater than the rates cap of 2.75 per cent) and other additional expenditure pressures including the increase to the superannuation guarantee, insurance and Workcover premium increases above inflation.

2.8.6 Efficiency savings of $1.5 million are included in draft Budget 2024/25. This results in $6.4 million of total permanent savings delivered in the four budgets of this elected Council. Cumulative savings through achieving annual permanent efficiency savings since the introduction of rates capping in 2016/17 are more than $113 million.

2.8.7 A general increase in fees and charges of 3.65 per cent based 0.25 per cent above forecast inflation (consistent with Council’s financial strategy), unless supported by benchmarking to provide targeted relief or cost recovery.

2.8.8 No debt – excluding finance lease liabilities which will remain as part of our financing strategy.

2.8.9 Cash reserves for operational needs including staff leave and contingency of $16.3 million.

2.8.10 Project investment in 2024/25 of $133 million to maintain, grow and improve services and assets.

2.8.11 Over the 10-year period, additional project investment for:

a) $45.9m for the acquisition of public open space to cater for Council’s growing population including creating new parks and green open space across the municipality including in Fishermans Bend and in areas across the City with lower access to these vital amenities.

b) $0.8m provision for the renewal of public Closed-Circuit Television (CCTV) to replace equipment nearing end of life. Noting that attempts at external funding of this renewal have so far been unsuccessful.

c) Updated budgets and timing for the delivery of a range of capital projects over the next 10 years (see detail in Attachment 2). Major projects include Eco Centre Redevelopment, South Melbourne Town Hall redevelopment, Shrine to Sea – Kerferd Road Forecourt and Median Works, St Kilda Pier Landside Works and Elder Smith Netball Courts and Pavilion.

2.8.12 A cash surplus of $0.68 million providing additional contingency for likely enterprise financial risks.

2.9 Before efficiency savings targets are applied, the draft Financial Plan includes a rates cap deficit of $106 million over the next 10 years which is an increase of $23 million since the adoption of Budget 2023/24 and 10-year Financial Plan. This growth in the rates cap deficit has been caused predominantly by persistently high inflation. Officers will look at ways to reduce this gap in preparation for the final budget and as part of the development of a new Council Plan with a newly elected Council next financial year.

2.10 It is expected that continued delivery of ongoing efficiencies and cost savings will play a key role in addressing the rates cap deficit along with other strategic levers such as setting fair and appropriate user charges, careful management and prioritisation of expenditure, and appropriate use of borrowing and reserves. A 1 per cent efficiency target per annum has been included in the Financial Plan. However, it is becoming increasingly hard for Council to identify new efficiencies in our operations, this is also made harder due to persistently high inflation.

2.11 Other financial risks arising such as further investment required in Fishermans Bend, continued cost shifting from other levels of government, adapting to climate change also need ongoing consideration.

2.12 In the Council Plan, significant investment continues to be projected over the 10-year period on important initiatives to deliver on the Council Plan outcomes and priorities:

2.12.1 Integrated Transport Strategy $32 million

2.12.2 Sustainable Environment Strategy $54 million

2.12.3 Public Space Strategy – $130 million

2.12.4 Don’t Waste It! Waste Management Strategy (2023-2025) implementation - $1.9 million.

2.13 In considering whether to approve the release the draft version of the amended Council Plan and draft Budget 2024/25 document, Council needs to assess the proposed amendments to the Council Plan and be satisfied that the draft Budget 2024/25 continues to be aligned to the vision for the municipality set out in the plan and continues to meet the financial sustainability principles.

3. RECOMMENDATION

That Council:

PART 1

3.1 Notes that the draft Budget 2024/25 has been informed by the Don’t Waste It! Waste Management Strategy 2022-25 and the updated Rating Strategy 2022-2025 (as endorsed for release for community consultation on 20 March 2024).

3.2 Notes that the draft Budget 2024/25 has been prepared in recognition of the cost-of-living pressures the community is facing. That increases to rates and charges have been minimised despite Council operating in a high inflation environment and continuing with targeted support to the community, and includes:

3.2.1 An increase of 2.75 per cent to the average general rate, which is equivalent to the rates cap set by the Victorian Government, and lower than forecast inflation.

3.2.2 Provisional rate in the dollar calculations (and in the Attachments to this report) based on preliminary valuations data which may change based on the final valuations. In the event of any change, the updated figures will be included in the Council resolution for the adoption of Budget 2024/25 on 26 June 2024.

a) Residential rate in the dollar 0.001720

b) Commercial rate in the dollar 0.002053

c) Industrial rate in the dollar 0.002032

d) Derelict land rate in the dollar 0.006880

e) Unactivated land rate in the dollar 0.006880

f) Vacant land rate in the dollar 0.005160

3.2.3 An increase in the Default Waste Charge of 2.72 per cent from $198.80 to $203.60 which is lower than inflation and the rates cap

3.2.4 Continuing targeted support to the community through:

a) One-off rate waivers up to a maximum of $750 on application up to 50 per cent of general rates and charges to the Chief Financial Officer in cases of extreme financial hardship.

b) Increasing the Council-funded pensioner rates rebate by 4.8 per cent to $220 in 2024/25 – the City of Port Phillip is one of the few councils that offers this scheme in addition to the State Government rebate.

c) Additional $40,000 funding for greater food support within the municipality. This is to respond to the greater demand for food relief to enable the purchase of additional food.

3.3 Notes Council’s Financial Hardship Policy (Attachment 4) has been updated to comply with relevant guidelines with the following key changes are:

3.3.1 Eligibility for a waiver of rates and charges available to residential ratepayers who are experiencing severe financial hardship. Noting that commercial and industrial ratepayers are best supported by Council’s economic development and tourism programs.

3.3.2 Inclusion of an appeals process.

PART 2

3.4 Notes that the draft Budget 2024/25 includes:

3.4.1 Fees and charges generally increasing by 3.65 per cent unless it makes sense to vary, and to provide support to those who need it most.

3.4.2 Statutory fees set by the Victorian Government will be updated prior to the final adoption of the budget based on the gazetting of 2024/25 penalty rates and units.

3.4.3 Ongoing efficiency savings of $1.5 million in Budget 2024/25 with a commitment to look for more during the financial year.

3.4.4 No debt, aside from some finance lease liabilities will remain as part of our financing strategy.

3.4.5 Cash reserves for operational needs including staff leave and contingency of $16.3 million.

3.4.6 Capital investment of $115.9 million to maintain, grow and improve services and assets including $44.9 million of land acquisition for public space facilities.

3.4.7 Intention to lease seven properties as required by section 115 of the Act as outlined in this report.

PART 3

3.5 Notes that the draft Budget 2024/25 includes the following items:

3.5.1 An additional $90,000 for specialist technical support and proactive maintenance measures to improve the health of existing palms and trials in available treatments for Fusarium Wilt disease.

3.5.2 An increase of $250,000 for the St Kilda Festival due to cost of operating the festival increasing significantly above inflation.

3.5.3 An increase of $51,000 to the annual funding provided to the Eco-Centre to fund above inflation cost pressures.

3.5.4 Annual funding of $68,000 for an 18-month trial period to facilitate the Eco-Centre to operate on both Saturday and Sunday.

3.5.5 A provision for Closed-Circuit Television (CCTV) renewal and upgrade as part of the capital portfolio due to the aging infrastructure over the next two financial years noting that attempts for external funding have so far been unsuccessful.

3.5.6 An increase in long day care fees of $10.00 per day from $147.00 to $157.00 representing a 6.80 per cent increase. This increase is reflective of significant cost pressures in Council running a long day service and is supported by industry benchmarking.

PART 4

3.6 Notes that the draft Budget 2024/25 results in a cumulative cash surplus of $0.68 million providing additional contingency for financial risks including the projected impact of inflation.

PART 5

3.7 Approves the release of the Council Plan 2021-31 updated for year four, inclusive of the Community Vision, Municipal Health and Wellbeing Plan, draft (10-year) Financial Plan, draft Revenue and Rating Plan, and the draft Budget 2024/25, amended to reflect any changes made through resolutions at this meeting, for community consultation (Attachments 1, 2 and 3).

3.8 Receives and hears feedback and submissions at the Special Council Meeting on 14 May 2024, commencing 6.30 pm at the St Kilda Town Hall, prior to considering adoption of the amended Council Plan 2021-31, including Budget 2024/25 at the Special Council Meeting on 26 June 2024 commencing 6.30 pm at the St Kilda Town Hall.

3.9 Authorises the CEO to make amendments to the draft amended Council Plan 2021-2031 (Attachments 1, 2 and 3) including the draft Budget 2024/25 to reflect any changes through resolutions at this meeting, and to make minor editorial adjustments and corrections to the document to prepare for publication and distribution.

3.10 Authorises the CEO to continue to provide Council projects and services within the parameters of the adopted Council Plan and Budget 2021-31 and any decisions of Council that have updated this and to authorise the CEO to incur planning, design and community consultation expenditure on new projects proposed in the draft Budget 2024/25.

4. KEY POINTS/ISSUES

4.1 Council adopted the Council Plan 2021-31, which sets out a 10-year vision and five strategic directions for the City, with a four-year focus on the specific actions Council will undertake to work towards achieving this vision. The Council Plan also incorporates the Municipal Health and Wellbeing Plan, 10-year Financial Plan and annual Budget.

4.2 Integration of Council’s planning, budgeting and resource allocation ensures strong alignment between the Council’s strategic priorities, and its services, programs and projects.

Parameters for review of Council Plan and Budget 2024/25

4.3 On 6 December 2023, officers presented a report to Council to provide an update on changes in our strategic and operating environment and to seek approval of the 10-Year Financial Outlook and the parameters for the review of the Council Plan and development of the Budget 2024/25.

4.4 This is year four of the Council Plan and Budget which includes several core strategies in place. The key focus is to execute on these core strategies. Adjustments to the Council Plan have generally been limited to updated assumptions, better information, changes in the operating environment, and Council decisions since the Plan was adopted.

Updates to Council Indicators

4.5 Council indicators provide a snapshot of our annual performance. They are reviewed annually to ensure targets are realistic, descriptors are clear, and that the suite of indicators provides a comprehensive picture of our performance as a Council.

4.6 Since 2022/23 we have included the frequency, each indicator is measured to provide clarity over when we will be reporting on them in the monthly CEO Report, Quarterly Report and Annual Report.

4.7 For 2023/24, the phrasing of all indicators was reviewed, to ensure it accurately describes what is being reported. The resulted in minor amendments to the description of 27 indicators.

4.8 For 2023/24, the following indicators have been added because they are new in the Local Government Reporting Framework (LGPRF):

a) Recently purchased library collection items

b) Library loans per population

c) Library membership per population

d) Library visits per head of population

e) Infant enrolments in MCH service

f) Percentage of food samples obtained per required number of food samples

4.9 For 2023/24, the following indicators have been removed, because they have been retired from the Local Government Reporting Framework (LGPRF) and the outcomes are achieved with other measures, or because data is no longer available:

a) Proportion of residents who agree Port Phillip has a culture of creativity (data no longer available)

b) Active library borrowers in the municipality (replaced with the new LGPRF indicator above)

c) Physical library collection usage (retired from LGPRF because physical collection is no longer a useful way to measure community benefit from the library service)

d) Percentage of participants accessing sport and recreation programs who are female or gender diverse (data no longer available) – Noting Council is currently developing more appropriate measures as part of the Fair Access Principles.

e) Proportion of residents satisfied with parks and open space (data no longer available)

f) Kerbside bin collection requests (retired from LGPRF, and outcome is achieved through existing measures)

Our Financial Strategy

4.10 The review of the Council Plan 2021-2032 year 4 and draft Budget 2024/25 is supported by our Financial Strategy, which provides clear direction on the allocation, management, and use of financial resources. It aims to ensure that Council remains financially sustainable while maintaining assets and services, responding to growth, and delivering on our priorities.

4.11 Over the next 10 years, we will face many challenges that require strong financial leadership. Key among these challenges will be cost increases above rates capping. Without action, the 10-year Financial Plan forecasts a cumulative $106 million funding gap.

4.12 We closely monitor the affordability of services and recognise ongoing community concerns about the financial impost of rates and the cost of other essential services. As such, we are not planning to apply for a rate increase above the rates cap over the life of the 10-year Financial Plan.

4.13 We plan to balance future budgets and close the financial gap by adjusting the following strategic levers:

Strategic Lever 1: Delivering efficiency and cost savings

4.14 The community's expectation for better value in Council service delivery has been reflected in Council's decision-making. Council has recently launched several initiatives to ensure that its services are delivered in the most efficient and effective manner possible. These initiatives include a Councillor led Cost Review Program last financial year and the ongoing successful drive for efficiency savings.

4.15 Efficiency savings of $1.5 million included in draft Budget 2024/25. This results $6.4 million of total permanent savings delivered in the four budgets of this Council. Cumulative savings since the introduction of rates capping in 2016/17 are more than $113 million. This has been instrumental in dealing with above cap cost increases.

4.16 Over the period of the financial plan, we will target the delivery of efficiency savings equivalent to 1 per cent of operating expenditure (less depreciation) per annum. This is expected to reduce our cost base by a cumulative $92 million over the 10-year period and will be key to addressing the rates cap deficit of the same amount.

4.17 Key initiatives to deliver these savings include a service review program, a commitment to better practice procurement and asset management, the sale of surplus properties, and investment in business process and system improvement and innovation through our Clever Port Phillip Program and day to day operations.

Strategic Lever 2: Appropriate use of borrowings and reserves

4.18 We have no debt other than some finance lease liabilities as part of our financing strategy. The are no plans to borrow beyond this in the 10-year Financial Plan.

4.19 However, we will consider borrowings for property acquisitions, large capital works or operating projects that provide intergenerational community benefit, and initiatives that deliver sufficient revenue streams to service the debt. Borrowings will not be used to fund ongoing operations.

4.20 We will maintain general reserves at levels sufficient to ensure operational liquidity. Reserves may be built up over time to part-fund large capital works or appropriate operating projects where this is considered more efficient than the use of debt.

4.21 Noting that reserves have been significantly built up over the past 10 years, with significant drawdown anticipated over the next ten years to deliver Council’s significant project portfolio.

4.22 The 10-year Financial Plan includes the use of general reserves as an internal source of borrowing for projects that pay for themselves over the long-term such as energy efficient street lighting upgrades on major roads. We are increasing our use of Open Space Contributions to fund our recently adopted Public Space Strategy.

4.23 The 10-year Financial Plan also includes a progressive build-up of the St Kilda Marina Reserve funded from significantly increased rental returns following the leasing process to ensure funds are available to maintain the foreshore precinct over the long term. We expect negative balances in the short to medium term reflecting Council’s contribution to addressing soil contamination when Council reclaimed the land.

Strategic Lever 3: Careful management and prioritisation of expenditure

4.24 We undertake a rigorous and robust budget setting process each year including a line-by-line review of operating budgets and proposed projects to ensure alignment with strategic priorities and best value. Performance is monitored closely throughout the year with forecasts updated monthly and reported to the public through the monthly CEO report.

4.25 In addition to the disciplined budget setting and expenditure monitoring, the strategy in the 10-year Financial Plan makes provision for $5.6 million per annum for operating projects (some years may be higher where the benefits justify increased investments or due to external funding).

4.26 Our focus on improved asset management sees investments prioritised on those assets most in need of intervention. Asset management plans guide this investment including greater investment in roads and footpaths. There is a focus on ensuring that these plans are reviewed and inform renewal activity.

Strategic Lever 4: Setting fair and appropriate user charges

4.27 The annual budget process includes a thorough review of user charges to ensure they remain affordable, fair, and appropriate. Council takes the position that those who directly benefit from and/or cause expenditure should make an appropriate contribution to the service, balanced by the capacity of people to pay.

4.28 As per Council’s Rating Strategy 2022-25 waste charges are separated from general rates. This aligns with the user-pays principle for private benefits such as direct waste services (for example, kerbside collection, hard waste and Resource Recovery Centre operations).

4.28.1 A tiered pricing structure to ensure fairer outcomes is used to recognise the different benefits received through kerbside collection services with pricing for different bin sizes, services and rebates.

4.28.2 Council’s waste charge pricing structure is largely compliant with the Local Government Service Rates and Charges Ministerial Good Practice Guidelines which were released in December 2023. Due to the short timeframe between receiving the guidelines and preparing the draft budget Council will further review compliance with the guidelines as part of 2025/26 budget development.

4.28.3 As part of implementing the adjustments to Council’s waste charge to align with the Good Practice Guidelines, there will be a minor change to the pricing structure of the waste charge in 2024/25 with the removal of the removal of the commercial car-spaces and storage areas waste charge for separately titled car-spaces and storage areas.

4.29 The 10-year Financial Plan assumes high-level planning for future increases linking Council user charges (other than waste) to forecast inflation plus 0.25 percentage points. This reflects the nature of our cost base (higher than CPI) and reduces our reliance on rates income. The application and impact of this policy setting will be reviewed annually to ensure affordability and fairness. For draft Budget 2024/25 fees and charges have generally increased by 3.65 per cent.

4.30 In determining whether default increases should apply we conducted benchmarking of fees and charges with surrounding municipalities and relevant industries:

4.30.1 There are some exceptions where we believe a larger increase is fair and reasonable such a parking fees at the South Melbourne Market which are increased every second year (not increased in 2023/24) and foreshore parking fees to better align with neighbouring Councils.

4.30.2 Some fees are proposed to be kept to 2023/24 levels or reduced to incentivise greater community usage. These include parking fees at Station Pier/Waterfront place and Acland Street to support greater utilisation.

4.31 Where possible for private benefit services such as childcare, we aim for service cost recovery. As such childcare fees are proposed to increase by 6.8 per cent in 2024/25 from $147.00 to $157.00 per day:

4.31.1 This increase is the gross cost of the service before the application of the Commonwealth Childcare Subsidy or the Free Kinder Subsidy. The above CPI fee increase is required to partially recover the direct cost (rising significantly above CPI) of the service alongside the changes in utilisation of services with overall declining birthrates and dropping attendance momentum in part associated with a prevalence of work from home (reducing some need for childcare).

4.31.2 Council is finalising scope to undertake an efficiency review in the coming months to ensure childcare services are operating at optimum efficiency and explore ways to mitigate cost increases while maintaining service quality.

4.31.3 The increase is also required to help ensuring compliance with National Competition Policy

Revenue and Rating Plan

4.32 Council rates will be levied according to the updated Rating Strategy (first endorsed 29 June 2022) which was presented to Council on the 20 March 2024. The updated strategy is currently released for community consultation with a proposal to expand differential rating.

4.33 As a result, our Revenue and Rating principles include:

4.33.1 Rates are levied in accordance with a ratepayer’s capacity to pay as measured by the Capital Improved Value (CIV) of property owned within the municipality. Rates levied are therefore directly proportional to the CIV of individual properties.

4.33.2 Higher differential rates will be set for commercial and industrial properties than residential properties due to their greater capacity to pay based on taxation benefits and higher rental yields as well to maintain fairness and consistency in the distribution of rates over time.

4.33.3 Higher differential rates will be set for derelict land, unactivated retail properties, and vacant land to assist with the development of our City consistent with Council Plan Objectives. This reflects the objectives to ensure the timely development, use and activation of all land and property within the municipality.

4.33.4 Consistent with our rating principle to manage the impacts of change, any major differential rating changes will be gradually taken into consideration in the annual general property valuation and demographic changes as part of the budget development process.

4.33.5 A Tiered Waste Service Charge structure set for all rateable assessments to recover the cost of waste services that are direct and or private benefits (such as kerbside collections, hard waste collection, and Resource Recovery Centre operations). Key changes to the waste charges and rebates in 2024/25 include:

· Removal of the commercial car-spaces and storage areas waste charge for separately titled car-spaces and storage areas.

4.33.6 Special rates and charges will be used where a specific benefit or service can be identified for certain ratepayers and only following consultation with the affected ratepayers.

4.33.7 Rates concessions are available for recreational land and pensioners. The City of Port Phillip is one of only a few councils that provide a pensioner rate rebate in addition to the Victorian Government pensioner rate rebate.

4.33.8 Self-funded retirees are entitled to request a deferral of their rates indefinitely at a discounted interest rate. Persons experiencing financial hardship may also, subject to application and financial assessment, access this benefit.

4.34 Non-rate revenue is underpinned by the following assumptions:

4.34.1 Universal services are funded from the broadest forms of income – rates and parking revenue.

4.34.2 User fees are reviewed annually as part of the budget process. A general increase of project inflation plus 0.25 per cent is proposed in line with our financial strategy.

4.34.3 Fees for subsidised services provided by Council in a market, such as childcare and aged care, will be based on a clearly articulated policy position. To achieve equitable outcomes, these services will be funded through a mix of user charges, government grants and rates.

4.34.4 Specific individual regulatory services such as, but not limited to, animal licences, parking permits and planning permits will be funded, where possible, through user charges (some may be set by statute) and otherwise through rates.

4.34.5 Council will pursue grants where possible. Being an inner metropolitan council and with a relatively sound financial position, we are unlikely to see a significant boost to grants revenue. Advocacy is a key focus in seeking to access grants where relevant.

4.34.6 Developer contributions (cash or land) are currently set at 8 per cent of site value for Fishermans Bend Urban Renewal Area and 5 per cent for the rest of the municipality. This is an important source of funding for investments in parks and foreshore open space assets.

4.34.7 In accordance with our Property Policy, rent will be charge at market value for commercial properties, and peppercorn or community rent may be charged to community groups that use Council properties to deliver

a) community services aligned with Council’s goals and priorities;

b) significant community benefit to the City;

c) have no capacity to generate income.

4.34.8 We will invest the community’s funds in accordance with the Act and our Investment Policy. Our investments with Authorised Deposit Institutions will balance the objectives of capital preservation, maintenance of liquidity, investment return targets, and corporate social responsibility. We aim to achieve average yield at the Bank Bill Swap Rate plus 50 basis points.

Targeted Financial Assistance

4.35 We recognise the impact municipal rates and other charges have on financially disadvantaged sections of the community. In addition to our commitment to keeping rates affordable we offer a range of assistance:

4.35.1 A Council-funded pensioner rebate (maximum) of $220 in 2024/25 increasing by 4.8 per cent from $210 – the City of Port Phillip is one of the few councils that offers this scheme in addition to the State Government rebate.

4.35.2 An option for self-funded retirees to defer their rates indefinitely half the official penalty interest rate set by the Victorian Government.

4.35.3 One-off waiver of a maximum of $750 on application up to 50 per cent of general rates and waste charges to the Chief Financial Officer in cases of extreme financial hardship.

4.35.4 Providing a 50 per cent waiver of the general rate for housing accommodation that provides reduced rentals for elderly persons of limited means.

4.35.5 Support for residents and ratepayers experiencing hardship through rate deferments and payment arrangements.

4.35.6 Ongoing $40,000 funding for greater food support within the municipality. This is to respond to the greater demand for food relief to enable the purchase of additional food.

Monitoring our financial sustainability

4.36 We use the Victorian Auditor General’s financial sustainability indicators to monitor our financial sustainability. Our financial strategy is designed to ensure an overall low risk rating over the period of the plan unless we can demonstrate it is prudent not to (i.e., for one-off abnormal transactions that do not have an enduring impact). As demonstrated in the table below, we are forecasting that Council will achieve an overall risk rating of low throughout the 10-year period.

The draft Budget 2024/25 at a glance

Operating result

4.37 Achieving an operating surplus is a key component of our financial strategy. It provides capacity to renew our $3.6 billion worth of community assets, meet debt repayment obligations, and manage the impact of financial risks materialising.

4.38 The draft Budget 2024/25 expects a $11.2 million operating surplus, which is $5.6 million higher than the Forecast 2023/24 of $5.6 million.

4.39 Operating result varies year or year as it is influenced by both recurrent and one-off changes to Council’s financial performance.

4.39.1 The higher operating result in 2022/23 was driven by high interest income, parking revenue, delayed operating portfolio spend (including operating spend on capital projects) and minimal loss on disposal of assets (divestments).

4.39.2 The lower operating result forecast for 2023/24 is predominately caused by the provision for return of government funding for aged care due to service delivery challenges in meeting contracted targets and a decrease in developer contributions due to increasing build-to-rent developments.

4.39.3 Over the 10 Year Financial Plan, an operating surplus is expected between $11.2 million and $20.2 million. This varies due to the timing of project grant funding and developer open space contributions and loss on disposal of assets (divestments).

4.40 Operating surpluses will be needed to fund the growing services caused by population growth and inflation.

Operating Revenue

4.41 Total revenue is proposed to increase by $7.6 million or 2.9% on Forecast 2023/24 from $259.1 million to $266.7 million. This is primarily related to:

4.41.1 A net increase in rates revenue of $4.3 million related to the 2.75% rates cap and property growth and $0.5 million increase in waste charges budgeted at cost recovery (a 2.72% increase)

4.41.2 An increase in fees and charges of $1.6 million allowing for both increased utilisation of council services and a 3.65 per cent average increase across fees.

4.41.3 A one-off increase in capital grants of $2.2 million mainly due to updated timing of project delivery.

4.41.4 An ongoing decrease in government funding of ($3.5) million (offset by a reduction in expenditure and FTEs) due to the Council decision to exit from the delivery of in-home aged care services.

4.41.5 A decrease in investment earnings of ($1.1) million due to reduced cash and investments due to the drawdown on reserves to fund delayed project delivery.

Operating expenditure

4.42 Budgeted 2024/25 operating expenditure of $255.5 million is a net increase on forecast 2023/24 of $2.0 million or 0.8 per cent from $253.5 million. The primary drivers for the increase include:

4.42.1 An increase in employee costs due to 2.5% Enterprise Agreement increase, Superannuation Guarantee rate increase from 11.0% to 11.5%.

4.42.2 Inflation budgeted at 3.4% (0.65% above rates cap).

4.42.3 Ongoing efficiency savings of $1.5 million, which partially offsets the expenditure increase.

4.42.4 An ongoing decrease of ($3.5) million (offset by a reduction in grant income) predominately in employee costs due to the Council decision to exit from the delivery of in-home aged care services.

4.43 The steady growth in operating expenditure in future years is largely driven by inflation (around 2.5 per cent per annum), service demand increases associated with population growth (around 0.5 to 1.3 per cent per annum), and the operating expenditure impact of new and improved assets (for example depreciation increase of 4 per cent per annum). This is partially offset by Council’s commitment to efficiency and cost savings (1 per cent per annum).

Rates – percentage increase

4.44 The draft Budget 2024/25, which funds a $115.9 million capital portfolio program and maintains or improves existing service levels, includes a 2.75 per cent rates increase, consistent with the Victorian Government rates cap. The Victorian Government had set the rates cap at 2.75 per cent which as lower than forecast inflation of 3.4 percent. Noting that updated forecast for inflation sit at 4.0 per cent (Reserve Bank of Australia) which is 1.25 per cent greater than the rates cap.

4.45 Draft Budget 2024/25 addressed the lower than inflation rates cap through a continued strong focus on prudent financial management, careful prioritisation and commitment to productivity and efficiency. Future rate increases are based on forward projections of inflation consistent with past decisions made by the Minister of Local Government for setting the rates cap.

Proposed fees and charges

4.46 In most cases, our fees and charges for 2024/25 are proposed to increase by 3.65 per cent. This approach is consistent with our financial strategy, and community feedback, which supported increasing user charges for some services. There will be variances where minor rounding equates to larger or smaller percentages.

4.47 Statutory fees set by the Victorian Government will be updated prior to the final adoption of the budget based on the gazetting of 2024/25 penalty rates and units.

4.48 The complete schedule of proposed fees and charges is contained within the draft Council Plan 2021-31 Year 4 Volume 2 (Attachment 2).

Underlying result

4.49 The adjusted underlying result is used to assess our ability to generate surplus in the ordinary course of business and excludes non-recurrent capital grants and contributions to fund capital expenditure from net result.

4.50 The underlying result varies significantly due to our reliance on external funding/contributions to fund our infrastructure asset works in the short term due to significant challenges in delivering our portfolio. For instance, Opens Space Contributions are collected, held in reserve to fund our Public Space Strategy.

Capital expenditure

4.51 Budget 2024/25 capital works expenditure of $115.9 million has increased due to the significant $45 million capital commitment to purchase land as per Council’s public space strategy. These land purchases are largely funded from open space contributions collected from developers and held in reserves.

4.52 In addition to this, there is the ongoing impact of project deferrals over the last three years caused by the COVID-19 pandemic and sector wide supply chain issues.

4.53 Capital works expenditure in 2024/25 totals $115.9 million, out of a total $121.1 million program. The $5 million gap represents the component of the capital program budget expected to be treated as operating expenditure, such as community engagement, feasibility studies, soil contamination remediation costs, and landscaping works.

4.54 Over the period of the financial plan, Council provides for appropriate levels of capital expenditure to ensure existing assets are maintained and improved whilst also investing in growth driven assets. The target of at least 150 per cent of depreciation is expected to be achieved.

Infrastructure renewal gap

4.55 The infrastructure renewal gap ratio shows the asset renewal and upgrade budget over the 10-year Financial Plan compared to depreciation. It assesses if Council’s spend on its asset base is keeping up with the rate of asset depletion.

4.56 Budget 2024/25 capital portfolio renewal and upgrade expenditure have increased in order to address the reduction in 2019/20 to 2023/24 caused by COVID-19 pandemic and construction sector wide delays.

4.57 Over the period of the financial plan, Council intends to stay above 120 per cent, which shows commitment to not only maintaining but upgrading existing assets. This is above the Victorian Auditor General Officer (VAGO) financial sustainability indictor which has a target of 100 per cent for a low-risk rating.

Council staff

4.58 Council employees are our most essential resource, enabling the delivery of a broad range of services. A reduction in total FTE is expected in 2024/25 due to the Council decision to exit from in-home aged care services in 2024/25. This has offset some minor increases in FTE mostly for compliance & safety, and service demand increases.

4.59 Budget 2024/25 includes ongoing targets to factor temporary vacancies/staff turnover in areas with high staff turnover.

4.60 Over the period of the financial plan, officers expect the growth in FTEs to increase marginally up to 1.3 per cent to service projected population growth.. Noting FTEs will increase with increased utilisation such as Childcare.

Property Leases

4.61 In accordance with section 115 of the Act, Council intends to lease the following properties on the terms listed as follows:

Property address	Permitted use	Commencing rent (excluding GST)	Lease term
222-228 Bank Street, South Melbourne	Community Use	Market Rent	Up to 3 years
85-87 Tennyson Street, Elwood	Neighbourhood House	$460 (if demanded)	Up to 5 years
11 Shakespeare Grove, St Kilda	Community Garden	$460 (if demanded)	Up to 10 years
333 Bay Street, Port Melbourne (Port Melbourne Town Hall)	Electrical Substation	Market Rent	Up to 21 Years
147 Liardet Street, Port Melbourne (upper level, excluding community hall)	Office	Market Rent	Up to 10 years
71A Acland Street, St Kilda	Food / Beverage	Market Rent	Up to 21 Years

5. CONSULTATION AND STAKEHOLDERS

5.1 Development of the Council Plan 2021-31 (Year 4) and Budget 2024/25 will involve community consultation on proposed changes compared to the Council adopted Council Plan 2021-31 (Year 3) and Budget 2023/24.

5.2 The community consultation process is planned for 18 April 2024 to 13 May 2024.

5.3 Given that this is the final year of a four year planning cycle, no major changes are being proposed to the Council Plan. Instead the focus has been on developing an annual budget that reflects policy and investment decisions of Council since the budget was adopted, responds to changes in the financial and operating environment, and prioritises the delivery of Council Plan priorities.

5.4 A key focus of the consultation process will be to seek feedback from the community on proposed changes to Rating Strategy 2022-25 including new higher differential rates for Derelict Land, Unactivated Retail Land and Vacant Land to address neglected land use that results in negative impacts to the municipality due to being under-utilised, causing safety and amenity concerns, vibrancy concerns, and not contributing to the overall purpose and objectives of the Council Plan.

5.4.1 The proposed changes to the Rating Strategy 2022-25 were considered by Councillors on the 20 March 2024 Council meeting.

5.4.2 Councillors approved the Rating Strategy 2022-25, including the proposed change, to go to community consultation as part of the consultation period for the Council Plan and Budget.

5.5 The community consultation process will encourage feedback via:

5.5.1 an online survey on the Council Plan and Budget | Have Your Say Port Phillip webpage with the option of paper-based survey

5.5.2 pop-up conversations around the municipality.

5.6 On 14 May 2024 at the Special Council Meeting, a hearing on the community feedback is scheduled to provide our community members the opportunity to speak to their submitted feedback.

6. LEGAL AND RISK IMPLICATIONS

6.1 The Local Government Act 2020 requires Council to undertake an annual review of the Council Plan and to develop an annual Budget, for adoption by 30 June. The Act also requires Council to engage with our community on these proposed changes and the draft budget in accordance with Council’s Community Engagement Policy.

6.2 Preparation and release of the draft Council Plan 2021-31 updated for year four and Budget 2024/25 for public comment as recommended is consistent with these legislative requirements.

6.3 The financial and non-financial tables supporting the draft Budget 2024/25 and draft Financial Plan have been prepared in accordance with regulations laid down by the Local Government (Planning and Reporting) Regulations 2020.

6.4 Officers will be reviewing the project portfolio between the draft and final versions of the Council Plan for deliverability. Any proposed changes to the timing of projects within the draft Council Plan will be reported as part of the adopted version of the Plan.

Financial Risks

6.5 Some of the key financial risks faced by Council include (a complete schedule can be found in Attachment 2: Council Plan and Budget Volume 2):

6.5.1 The increasing occurrence of Build to Rent developments (no subdivision) which are not required to pay developer contributions impacting Council’s ability to afford to expand and create new public open space despite a growing population.

6.5.2 The funding and financing plan for Fishermans Bend remains uncertain and is a responsibility of the Victorian Government (as such this is an advocacy priority for Council). There may be a large funding gap between the infrastructure desired at Fishermans Bend and what can be funded. A failure to appropriately budget for the costs of running and looking after new assets in Fishermans Bend is also a potential risk.

6.5.3 Works are progressing to test key sites to quantify the likely financial impact of soil contamination. Projects included in the 10-year plan assume high level estimates of soil contamination.

6.5.4 Rate capping. The 10-year Financial Plan assumes rate capping based on inflation. Since its introduction, the Minister for Local Government has prescribed rates based on forecast inflation, which have been lower that actual inflation. Further, in 2023/24 the rates cap was set lower than inflation which included a 0.5% cost of living factor – the risk of future adjustments has increased with this development. Every 0.1 per cent lower than the ESC methodology equates to a $0.13 million reduction per annum in revenue.

6.5.5 A more subdued property development market may result in rates revenue growing at a lower rate than projected; around 0.5 to 1.3 per cent per annum figure assumed in the 10-year Financial Plan. Every 0.1 per cent reduction in growth equates to a $0.13 million reduction in revenue per annum. This may also indirectly impact user fees and statutory fees including statutory planning, street occupation permits, road closures, skip bins etc.

6.5.6 Current MAV WorkCover Scheme wind-up and residual liability will have to be met over the short to medium term.

6.5.7 The possibility of a future unfunded defined benefits superannuation call (which if it eventuates will be funded from reserves in the first instance and then repaid over time).

6.5.8 Future reductions in funding from other levels of government or increases in cost shifting. Key changes include the significant increase to the EPA landfill levy, congestion levy, growing compliance and regulations related to Council Assets, Swimming Pool Regulations, Electrical Line Clearance, Aged Care Reforms and CCTV maintenance and renewal.

6.5.9 Not realising targeted efficiency savings.

6.5.10 A major, unexpected, asset renewal/upgrade challenge (for which Council maintains an asset renewal reserve).

6.5.11 Funding the mitigation of risks associated with climate change and adaption ensuring that Council’s community assets and services remain able to meet community needs.

6.6 Notwithstanding these risks, our sound financial position with low levels of borrowing and healthy reserves balance enable us to respond to these financial risks in the 10-year period if they arise. If necessary, we can also apply to the ESC for an above rates cap increase.

7. FINANCIAL IMPACT

7.1 Direction 5 of the Plan “Well Governed” highlights the importance ‘a financial sustainable, high performing and community focused organisation’ to underpin delivery of the direction and outcomes defined in the Plan.

7.2 As outlined under Financial Strategy in this report, this Plan operates within the rates cap and maintains financials sustainability while investing in assets.

7.3 Any resource implications of proposed adjustments to the draft Council Plan have been represented in the Financial Plan (10-year) and draft Budget 2024/25.

7.4 The strategic direction, Sustainable Port Phillip is a key outcome for our City with a sustainable future, where our community benefits from living in a bay side city that is cleaner, greener, cooler and more beautiful.

7.5 In our long-term challenge, Climate change and the environment, we aim to reduce our own emissions and prepare our City and community for a changing environment. This requires investment in our assets, changing how we deliver our services and working with our community and partners to mitigate and adapt to climate change.

7.6 This focus aims to underpin Council’s resolution of calling a climate emergency. We are building our first Climate Emergency Plan.

7.7 There are several investments designed to improve environmental outcomes including:

7.7.1 ongoing Waste Transformation Program as outlined in the Don’t Waste It! Waste Management Strategy which includes new waste services such as FOGO and Glass recycling

7.7.2 Elwood Foreshore Redevelopment (which includes greater climate resilience of infrastructure)

7.7.3 enhanced drainage cleaning to mitigate impacts of flooding

7.7.4 fully funded Public Space Strategy

7.7.5 investment in high-cost engineering solutions to improve electrical line clearance compliance while reducing the impact on tree canopy coverage

7.7.6 continuing our annual Greening Port Phillip Program and developing a new Urban Forest Strategy and Street Tree Planting Program.

7.7.7 greater focus on climate resilience and environmental sustainability in asset management as outlined in the Enterprise Asset Management Plan 2022-2032.

7.7.8 additional funding commitment to facilitate the implementation of the Act and Adapt Strategy 2023-2028

7.7.9 continuing to improve the City’s climate resilience.

8. COMMUNITY IMPACT

8.1 The Council Plan 2021-31 updated for year four and draft Budget 2024/25 provides the foundation, directions and strategies needed to fulfil the various functions required of councils under the LGA and other legislation. It defines what Council will deliver over the next ten years, by identifying what we will provide, how we will work in partnership with other entities and what we will advocate for on behalf of our communities.

8.2 The proposed changes to the Council’s Rating Strategy 2022-25 are likely to have several direct and indirect impacts on the community:

9.1.1 Affordability - The Rating Strategy, together with other Council policy initiatives, must consider the possibility that rates may become unaffordable for groups in the community. In response to this, the Rating Strategy retains an emphasis on targeted support for financially disadvantaged members of our community. This is managed through Council Financial Hardship Policy.

9.1.2 Safety – The higher rating burden associated with derelict, vacant and un-activated retail land is likely to establish a significant disincentive for these land types and ultimately reduce their prevalence in the municipality. In turn this will help mitigate the safety and amenity concerns around these types of land (e.g., unsafe buildings, anti-social behaviour etc).

9.1.3 Vibrant City – The higher rating burden associated with derelict, vacant and un-activated retail land is likely to establish a significant disincentive for these land types and ultimately reduce their prevalence in the municipality. In turn this will help improve the vibrancy of the municipality to ensure that land is used to it’s full potentially (e.g., to increase the availability of housing or to ensure that High Streets are activated).

9.1.4 Economic - The Rating Strategy, together with other Council policy initiatives, aim to mitigate the economic impacts on business and the impact on the wider, economic viability of the community caused by the prevalence of vacant land, derelict land and un-activated retail land.

9. ALIGNMENT TO COUNCIL PLAN AND COUNCIL POLICY

9.1 The proposed amended Council Plan 2021-31 for year four, when adopted, will replace the current version of the plan.

10. IMPLEMENTATION STRATEGY

10.1 TIMELINE

10.1.1 Assuming Council resolves to release the draft Council Plan 2021-31 for public consultation at this meeting, the following will occur:

20 March 2024	Rating Strategy 2022-25 (updated) endorsed by Council for releasing for community consultation as part of the Council Plan and Budget engagement.
17 April 2024	Draft Council Plan 2021-31 (Year Four) and Budget 2024/25 presented for Council to consider releasing for community consultation
18 April to 13 May 2024	Consultation period begins for the Draft Council Plan 2021-31 (Year Four), Budget 2024/25 and updates to Rating Strategy 2022-25.
14 May 2024	Hearing of community feedback on the Draft Council Plan 2021-31 (Year Four), Budget 2024/25 and updates to Rating Strategy 2022-25.
26 June 2024	The updated Council Plan 2021-31 (Year Four), Budget 2024/25 and updated Rating Strategy 2022-25 presented at a Special Meeting of Council to consider for adoption.

10.2 COMMUNICATION

10.2.1 Release of the draft Council Plan 2021-31 for community consultation will be promoted on Council’s website via Council’s communication channels, including Divercity, Have Your Say and social media. Documents will also be available at St Kilda and Port Melbourne town halls and our libraries.

11. OFFICER material OR general INTEREST

11.1 No officers involved in the preparation of this report have a material or general interest in the matter.

ATTACHMENTS

1. Draft Council Plan and Budget Volume 1 (Year 4)⇩

2. Draft Council Plan and Budget Volume 2 (Year 4)⇩

3. Draft Council Plan and Budget Volume 3 (Year 4)⇩

4. Financial Hardship Policy Rates and Charges (Version 5)⇩

13.5	Records of Informal Meetings of Council
Executive Member:	Joanne McNeill, Executive Manager, Governance and Organisational Performance
PREPARED BY:	Emily Williams, Council Business Advisor

13.2	Proposed Discontinuance of Road (in part) Johnson Street, South Melbourne
Executive Member:	Lachlan Johnson, General Manager, Operations and Infrastructure
PREPARED BY:	Vicki Tuchtan, Head of Property Operations & Facilities

13.3	Procurement Policy Minor Amendment
Executive Member:	Lachlan Johnson, General Manager, Operations and Infrastructure
PREPARED BY:	Wayne Moore, Coordinator Procurement, Contracts & Fleet