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A Robust Business

A Robust Business Picture of Submarine Wharf, Sub Base Platypus, photography by Ben Guthrie, The Guthrie Project, with title "A Robust Business" in the background.

A Robust Business

The Harbour Trust’s leasing portfolio continues to perform strongly across commercial and residential leasing. The commercial portfolio performed well with less than a four per cent vacancy over the year. The residential portfolio has proven to be in high demand with full occupancy by the end of the financial year.

This is particularly pleasing given the impacts of COVID-19 on tenants, with many in sectors heavily impacted by COVID-19 such as childcare, food and beverage, fitness, and professional service businesses. In April 2020, the Harbour Trust received approval from the Australian Government to access a portion of the Markham Close funds to provide up to six month’s rent relief for a subset of commercial and residential tenants that meet agreed criteria. This has supported the health of the tenancy base through the COVID-19 period, accelerating the recovery and protecting long term revenue sources for the Harbour Trust.

Short-term accommodation on Cockatoo Island is an important income source for the Harbour Trust, and from March was severely impacted by the pandemic. This necessitated the suspension of the Harbour Trust’s accommodation offering.

Commercial leasing

The Harbour Trust’s commercial leasing portfolio continues to be highly competitive and, through offerings at Sub Base Platypus, has cemented a presence in the North Sydney and CBD marketplaces. Growing interest in this site has seen 130 enquiries and 85 inspections from interested parties. Tenants currently operating from the site include architectural services, recreational community services and environmental consultants.

There continues to remain a diversity in the type of businesses tenanted across all sites.

Residential leasing

The Harbour Trust manages 55 residential homes, located in North Sydney, Mosman, Manly and Vaucluse. Two full renovations were undertaken to properties during the last financial year and two newly refurbished apartments at Sub Base Platypus were successfully released to the market.

The residential portfolio has represented an opportunity for the Harbour Trust to contribute to the community by providing a number of residences for short and long-term uses.

Tenant survey

A commercial tenant satisfaction survey was conducted during 2019, however the response rate was too low to be statistically significant.

Throughout the COVID-19 period positive ad-hoc feedback, particularly in relation to rental support processes and outcomes, was received.

A further survey is scheduled for 2020-21 (subject to the impact of COVID-19) and will again provide an opportunity for tenants to provide vital performance feedback.

Accommodation

The temporary accommodation at Cockatoo Island targets domestic, international, corporate and school group visitors. There are a range of accommodation options, including a campground (BYO and deluxe camping), as well as heritage houses and apartments.

Building on the refurbishment of the heritage houses and apartments conducted in 2019, further works were undertaken, particularly following storm damage which occurred in late 2019. The program of tent and camping equipment replacement continued through the year, as did the refurbishment of the shower blocks and communal kitchen area. Supporting infrastructure investment on the plateau of the island created additional break-out spaces for conference groups, or spaces for school groups in inclement weather. In addition, a new larger cinema space was installed for overnight visitors. This investment ensures that the offering remains competitive and assists with guest satisfaction.

In 2019-20, the Harbour Trust continued to work with schools and supported organised educational activity from specialist providers including Urban Challenge, Lands Edge and Outdoor Education Australia.

Licensing and venue hire

The Harbour Trust secured several high-profile events and filming projects in 2019–20, including projects with Endemol Shine, ABC TV and Network Nine. These were filmed at North Head Sanctuary.

Cockatoo Island hosted the One Electric Day concert in November 2019, a sold-out concert for more than 5,000 people, featuring John Farnham and other well known performers.

February 2020 saw Sydney Sail GP, return to the island for the second season, along with the Red Hot Summer Tour that was subsequently cancelled due to poor weather.

The Harbour Trust allows activities including weddings, exhibitions and filming and photography to be conducted on Harbour Trust sites. Over the reporting year 71 low-impact permits were issued.

Corporate governance

Meetings of the Members of the Trust

In 2019–20, the Members of the Trust met eight times. Michael Rose AM was appointed as a Member of the Trust in September 2019. Jean Hay AM and Garth Callender were reappointed in July 2020.

Members of the Trust

Period as the accountable authority or member within the reporting period

Name

Position Title / Position held Executive / Non-Executive

Date of Commencement

Date of cessation

Number of meetings of accountable authority attended

Joseph Carrozzi

Chair, Non-Executive

July 2018

-

8 of the possible 8

Jean Hay AM

Deputy Chair, Non-Executive

July 2020

-

8 of the possible 8

Garth Callender

Non-Executive

July 2020

-

8 of the possible 8

Josephine Cashman

Non-Executive

July 2018

-

3 of the possible 8

Sandra Hook

Non-Executive

April 2019

-

8 of the possible 8

Jessica Keen

Non-Executive

July 2018

-

8 of the possible 8

Tim James

Non-Executive

April 2019

-

8 of the possible 8

Michael Rose AM

Non-Executive

September 2019

-

6 of the possible 6

See Harbour Trust Overview for qualifications and further information on the Members of the Trust.

Tenant Assistance Sub-Committee

During the reporting period the Tenant Assistance Sub-Committee was established to respond to the impact of the COVID-19 pandemic on the business operations of Harbour Trust tenants. The sub-committee met six times during the reporting period.

Portfolio Audit Committee

The Portfolio Audit Committee was established by the Accountable Authorities of the Department of Agriculture, Water and the Environment, the Director of National Parks and the Harbour Trust. This committee provides independent advice to the Members of the Harbour Trust (as the accountable authority) on the Harbour Trust’s risk, finance, control and compliance frameworks and its external accountability responsibilities. A copy of the committee’s charter is available on the Department of Agriculture, Water and the Environment’s website at www.awe.gov.au/about/reporting/portfolio-audit-committee-charter-feb-2020. There are two subcommittees of the Portfolio Audit Committee; the Financial Statements Sub-Committee and the Performance Reporting Sub-Committee.

The Portfolio Audit Committee met four times in 2019–20. Information about the committee members, their qualifications, knowledge, skills or experience, their attendance during 2019–20 and their remuneration is included following. Garth Callender attends the committee meetings representing the Members of the Trust.

Portfolio Audit Committee membership

In the reporting period members of the Committee were:

Portfolio Audit Committee members

Member

Qualifications, knowledge, skills or experience

(include formal and informal as relevant)

Number of PAC/Audit Committee meetings attended

Total annual remuneration

(GST Incl.)

Mr Geoff Knuckey

· PAC Independent member and Chair

Geoff’s career has included 32 years with Ernst & Young specialising in the areas of financial statements auditing and reporting, internal audit, corporate governance, and risk management. In 2009 Geoff commenced his current full time role as a professional director comprising Board non-executive director roles and Audit and Risk Committee positions in the private and public sectors.

4

*

Mrs Jenny Morison

· PAC Independent Member

· Financial Statements Sub-Committee Chair

Jenny Morison FCA, B.Ec (Sydney Uni) has thirty eight years of broad experience in the accounting profession, commerce and government.

She was a National Board Member of the Chartered Accountants of Australia and New Zealand for four years, CFO of a public company and has held senior positions in the major international accounting firms.

Jenny founded Morison Consulting Pty Limited in 1996, specialising in government financial reforms, governance and consulting. She was awarded a Centenary medal in 2000 for services to women and accounting.

Jenny brings a wealth of experience having held roles as an independent member and chair of Commonwealth audit and risk committees and financial statement sub-committees for large and small government entities for the last 17 years.

4

*

Mr Michael Roche

· PAC Independent Member

· Performance Reporting Sub-Committee Chair

Michael is an independent management consultant. He has a wide range of experience at senior levels in the Commonwealth Government in both central and operational departments. His background includes corporate and financial management, program management and policy development. Since leaving the public sector he has consulted widely on strategic management issues, and has been a member of private sector boards and public sector advisory boards. He has been a member of, and chaired, both private sector and public sector audit committees. His qualifications include BA (Accounting), FCPA and MACS (senior).

4

*

Dr David Bryant

· PAC Independent Member

David has 35 years of experience in delivering IT/Business alignment and project management consultancy services across the Australian Public Service. He currently lectures on accounting information systems at the Australian National University. Dr Bryant’s expertise in ICT/Business management has enabled him to provide valuable advice and assurance to a range of government departments through consultancy and audit committee services. Dr Bryant has experience in delivering audit committee services to the Department of Human Services, IP Australia, Department of Education and the Department of Industry, Innovation, Science and Resources.

2

*

Mr Dean Knudson

· PAC Internal Member

Dean is the Deputy Secretary overseeing the Commonwealth’s efforts to protect Australia’s biodiversity and heritage - ranging from the Murray Darling basin to the Great Barrier Reef. Prior to moving to Australia in 2012, Dean worked for 20 years with the Canadian Government. He led a range of key economic and environmental reforms, in the Prime Minister’s department, the Treasury, and the Environment and Industry departments. Dean has a Masters degree in Economics from Queen’s University in Canada and is certified in conflict resolution.

4

*

Ms Kristin Tilley

· PAC Internal Member

Kristin is the First Assistant Secretary of the Environment Protection Division. Kristin commenced in this role in August 2019. This Division includes the National Waste and Recycling Taskforce, Waste Management Branch, Ozone Protection and Air Quality Branch and the Chemicals Management Branch. Kristin has more than 12 years’ experience working on climate change issues in the Australian Public Service, including two years as a senior advisor to the Climate Change Minister. Prior to joining the public service, she worked for an environmental law NGO in Brisbane.

3

*

*Remuneration for members of the Portfolio Audit Committee is paid by the Department of Agriculture, Water and the Environment. Information about remuneration is reported in the department’s annual report.

Australian National Audit Office Audit

In 2018–19, the Australian National Audit Office (ANAO) completed an audit of the Harbour Trust, covering the Effectiveness of Board Governance at the Sydney Harbour Federation Trust. In line with the ANAO report findings, the Harbour Trust updated its Members Charter during 2019-20.

Fraud control

Fraud control within the Harbour Trust is overseen by the Members of the Trust, as well as the Portfolio Audit Committee. The basis of the Harbour Trust’s fraud policies and procedures is the Commonwealth Fraud Control Framework.

During the reporting period, the Fraud Control Policy was reviewed and fraud awareness training was conducted for all staff who commenced employment at the Harbour Trust.

Indemnities and insurances

In 2019-20, the Harbour Trust had the following key insurance policies with Comcover:

  General Liability

  Professional Indemnity

  Directors & Officers Liability

  Property & Motor Vehicle

In addition, the Harbour Trust held workers compensation insurance with Comcare. The Harbour Trust did not provide any indemnities to directors or officers for liabilities or claims against them during the reporting period.

Procurement

The Harbour Trust’s procurement guidelines, procedures and templates are consistent with the Commonwealth Procurement Rules. A contractor management audit was conducted during the reporting period and recommendations from that audit are being implemented.

Tendering and contracting

The Harbour Trust undertakes both major construction design and project works.

In 2019-20, the Harbour Trust ran one tender for specialist services:

  Barging: $251,883 (2019-20 portion of 3 year contract)

The Harbour Trust also engaged consultants with a total value of $1,657,155 (excluding GST) to provide specialist advice relating to sites [such as acoustics, archaeology, bushfire management, conservation and heritage, engineering services, environmental services, fire and safety, graphic design, IT, legal fees and disbursements, marketing and public relations, planning and other technical aspects].

Government policy orders

A Government Policy Order (GPO) is an order made by the Minister for Finance under the Public Governance, Performance and Accountability Act 2013, that specifies a policy of the Australian Government that is to apply to one or more corporate Commonwealth entities.

The Harbour Trust is subject to one GPO, being the Public Governance, Performance and Accountability (Charging for Regulatory Activities) Order 2017. The Harbour Trust charges for regulatory activities such as Liquor Permits and Planning Applications (previously referred to as Development Applications) that occur on its land. A Cost Recovery Implementation Statement (CRIS) is published on the Harbour Trust’s website, which reports financial and non-financial performance information for these activities and contains financial forecasts for three years from 2019–20.