MEETING OF COUNCIL - Town of Cambridge

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COUNCIL MINUTESTUESDAY 26 FEBRUARY 2013Comments receivedDuring the period of the survey, a number of comments were received from affected propertyowners outlining their views. Two main issues emerged.CostEquity"too prohibitive, the estimate and cost escalation from previous projectscosts too excessive.""It's simply not fair and equitable to ask property owners to pay morethan 50%, based on previous State Underground Power Projects onlyrequiring 50% from property owners."Other comments include that some property owners are at the stage of life where they wouldnot necessarily realise the befit of underground power, and that the Town should not be payingfor Western Power's infrastructure.It should be noted that the Town has not subsidised property owners in the three previousUnderground Power projects implemented by the Town through the State Underground PowerProgram (SUPP).If the Council was to consider increasing the financial subsidy, it is recommended that allproperty owners in the Town be canvassed about using Town funds in this way.Response RatesCouncil has not formed a position on what an adequate response for the survey might be toadvance to the next stage. To assist the discussion, the following table is provided outlining theprevious underground power projects delivered by the Town under the State UndergroundPower Program.ProjectProjectDateNo. ofPropertiesResponseRateSurveyResults -Willingnessto payFundingShareAveragePropertyWembley (Pilot Project) Jun-98 1,166 38% 68% 33% $1,190Nth Wbley/West Leederville* Jan-99 1,981 61% 72% 50% $1,610Daglish/Jolimont Feb-99 24 refer above refer above 50% $1,950City Beach Aug-04 1,630 49.30% 77.40% 50% $3,500Remaining Area (Dec 2012Survey)Dec-12 4,360 45% 42% 60% $8,000Possible change to Government policyThe March 2012 report to Council made reference to two impending State Underground PowerProgram reviews by both the Minister for Energy and the Treasurer. Of note, both reportshighlight an alternate model based on a differential contribution from property owners, which inturn is based on the median house price of the project area.Put simply, it suggests that property owners in higher valued project areas would pay morethan those in lower valued areas.H:\CEO\GOV\COUNCIL MINUTES\13 MINUTES\FEBRUARY 2013\C CR.DOCX 185
COUNCIL MINUTESTUESDAY 26 FEBRUARY 2013A similar concept was contemplated at workshops convened by the Economic RegulatoryAuthority (now the Public Utilities Office), which was attended by Local Governmentrepresentatives.In the lead up to the State Election, both the Government and the Opposition will be monitoredfor their policy position on the State Underground Power program moving forward.Options moving forward and basis for the recommendationThe previous commentary in this report has indicated that overall, support is not overwhelmingand that there is no particular subset of the survey area where the majority of property ownersindicated strong support for the proposal. However Council may consider that there is merit inproceeding to do a detailed design and costing of a small project area, at the very least toascertain current costings. This exercise would assist in considering future proposals, whetherunder the State Underground Power Program or a revised Town of Cambridge approach.Round 6 of the State Underground Power Program (SUPP)Despite the current review of the underground power program, it is anticipated that theGuidelines for Round Six Major Residential Projects will be released later this year along with acall for expressions of interest from local governments. Round six may commence from 2015.Irrespective of the survey, it is the intent of the Town to continue to submit applications to theSUPP.POLICY/STATUTORY IMPLICATIONS:There are no Policy or Statutory Implications related to this report.FINANCIAL IMPLICATIONS:In 2012, the Town met with the State Underground Power Program unit of Western Power todiscuss the preliminary project parameters for undergrounding power to the remaining areas ofthe Town.A basic desktop analysis suggests that the total cost of the project would be in the vicinity of$47.5 million, but that this estimate could be reduced to $41.5 million if an alternate internalcost recovery model was adopted by Western Power. In addition, with a contribution byWestern Power of 10% (recognising the financial benefit they would enjoy from undergroundpower to reduce their overhead power costs), the cost to the Town/Property Owners would beapproximately $37.4 million.Consistent with the March 2012 decision of Council, a one third contribution by the Town wouldrequire $12.5 million from the Town's reserves and the Endowment Lands Account, with thebalance of $25 million being funded by the property owners.STRATEGIC DIRECTION:The Strategic Plan states:“Financial Sustainability - Ensure strategies are in place for maintaining the Town's wealth. Wewill plan to prudently invest the land proceeds due to the Town over the next five years, suchthat both current and future generations benefit.”H:\CEO\GOV\COUNCIL MINUTES\13 MINUTES\FEBRUARY 2013\C CR.DOCX 186
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MEETING OF COUNCIL - Town of Cambridge

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