Ordinary Meeting of Council 23 March 2016

4.1 AMENDMENT TO OFFER TO PURCHASE - PORTION OF CITY'S LOT 3 QUIN/SMITH ROADS, BULLSBROOK

Ward: (North Ward) (Asset Management)

Disclosure of Interest: Nil

Authorised Officer: (Executive Manager Operations)

KEY ISSUES

• Council, at its meeting of 16 December 2015, resolved to accept the Water Corporation’s offer of $126,000 for the purchase of approximately a 1.4293ha portion of the City's Lot 3 Quin/Smith Roads, Bullsbrook inclusive of an access easement over an existing track within the City's lot.

• A difference in the Water Corporation’s understanding of the in principle agreement from that believed to have been reached at an officer's level was identified following receipt of the City's formal acceptance of their offer. The difference being that the Water Corporation was of the understanding that the proposed access easement would be included in the land being acquired by it and that they would be granting an easement over the subject portion of the access track to the City which is the reverse of the City's understanding.

• The Water Corporation's valuer’s re-assessment of compensation, based upon the purchase of approximately a 1.2273ha portion of the City's Lot 3 and the grant of access easement to it over a portion of the City's existing track (comprising an area of approximately 0.265ha), has been determined as $107,000 (One Hundred & Seven Thousand Dollars).

• As the basis upon which the City's compensable valuation of $102,000 was determined is unchanged it remains valid.

• The amended sale price has been re-advertised in accordance with the Local Government Act 1995 and on the close of the advertising period no submissions were received.

It is recommended that the Council resolve to accept the Water Corporation’s amended offer of $107,000 for the purchase of portion of the City's Lot 3 Quin/Smith Roads, Bullsbrook with a grant of an access easement over portion of the existing track subject to conditions.

Page 1

Ordinary Meeting of Council 23 March 2016

BACKGROUND

Council, at its meeting of 16 December 2015, generally resolved to accept the Water Corporations offer of $126,000 for the purchase of approximately a 1.4293ha portion (inclusive of a grant of easement over the existing track) of the City's Lot 3 Quin/Smith Roads, Bullsbrook for the purpose of it constructing and operating a high level tank site for the provision of domestic water supply to service growth in the Bullsbrook area.

Council's resolution was conditional upon the Water Corporation agreeing to undertake and meet all costs involved in the subdivision, transfer and grant of easement of the portions of the City's land to it. The Chief Executive Officer was also delegated authority in the finalising of the contract of sale and documentation necessary to facilitate the Water Corporation’s transfer of the portion of land to it.

DETAILS

At the time of formalising the City's acceptance of the Water Corporation’s offer for the purchase of the approximately 1.4293ha portion (understood to include an access easement in the Water Corporation’s favour) of its Lot 3 Quin/Smith Roads the Water Corporation noted a difference between the parties understanding of the in principle agreement. The Water Corporation was of the understanding that the access easement area would form part of that land being acquired by it and they would be granting an easement over the affected portion of the access track to the City which is the reverse of the City's understanding. It was immediately clarified that this approach was problematic in that the City has lease arrangements with Vodafone Networks and RAAF, both of whom, under the terms of their respective leases, have a right of access over the track to their lease holds. For this reason it is considered best that the affected portion of the access track should remain part of the City's balance land and that it grant the Water Corporation an access easement over the track.

The Water Corporation accepts the City's above access and lease arrangements currently in place over the track, and agrees to this land being excluded from that being acquired by them in place of a grant of easement over the portion of track. However, they require their offer, based upon valuation advice on their initial understanding, to be amended accordingly.

The Water Corporation's valuer's re-assessment of compensation, based upon the purchase of approximately a 1.2273ha portion of the City's Lot 3 and the grant of access easement to it over portion of the City's existing track (comprising an area of approximately 0.265ha), has been determined as $107,000 (One Hundred & Seven Thousand Dollars). However, under the terms of the proposed Contract of Sale, if the survey of land in question results in a variation in area of 5% or more, either up or down, then the purchase price shall be varied, upwards or downwards, by that amount multiplied by the $/m2 rate of $8.72 applied by the purchaser's valuer upon which their offer is based.

The basis upon which the City's compensable valuation of $102,000 was determined does not change so its valuation remains valid.

The amended sale price has been re-advertised in accordance with the Local Government Act 1995 and on the close of the advertising period no submissions were received.

Page 2

Ordinary Meeting of Council 23 March 2016

CONSULTATION

In accordance with the Local Government Act 1995, the proposed sale was re-advertised based upon the amended offer and on the close of the advertising period no submissions were received

ATTACHMENTS

Water Corporation land requirement plan

STRATEGIC IMPLICATIONS

Nil

STATUTORY IMPLICATIONS

Sale of land is governed by section 3.58 of the Local Government Act 1995.

FINANCIAL IMPLICATIONS

The City will receive $107,000 (exclusive of GST) for the sale of land.

VOTING REQUIREMENTS

Simple majority

Page 3

Ordinary Meeting of Council 23 March 2016

RECOMMENDATION

That the Council resolve to:

1) Accept the Water Corporation’s amended offer of $107,000 (One Hundred & Seven Thousand Dollars) for the purchase of approximately a 1.2273ha portion of the City's Lot 3 Quin/Smith Roads, Bullsbrook (set out on Diagram of Survey 11439 and comprised in Certificate of Title Volume: 2154 Folio: 540) and a grant of an access easement (comprising an approximate area of 0.265ha) over the existing track within the City's remaining landholding subject to:

i) any variation in the area, following its survey, by 5% or more, either upwards or downwards, then the purchase price shall vary, upwards or downwards, by that amount multiplied by the $/m2 rate of $8.72 applied by the purchaser's valuer upon which the offer is based; and

ii) the Water Corporation agreeing to undertake and meet all costs involved in the subdivision, transfer and grant of easement of the portions of land to it; and

2) Note that the reason for the change in the purchase price previously offered by the Water Corporation, for the amount of $126,000, is due to a misunderstanding in the general area of land being purchased by the Water Corporation which they assumed was to include the land comprising portion of the access track; and

3) Delegate authority to the Chief Executive Officer for the finalising of the contract of sale and all necessary documentation to facilitate the Water Corporations transfer of the portion of land to it.

CARRIED

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