Special Council Meeting

Notice is given that a Special Meeting of the Kingston City Council will be held at 7.00pm on Tuesday 12 March 2013 at 1230 Nepean Highway, Cheltenham. 1 Apologies

2 Disclosure by Councillors, Officers or Contractors of any Conflict of Interest

3 Items of Business

Notice is given that a Special Meeting of the Kingston City Council has been scheduled for 7.00pm on Tuesday 12 March 2013 at 1230 Nepean Highway Cheltenham.

Business will be as follows:

1. Apologies

2. Disclosure by Councillors, Officers or Contractors of any Conflict of Interest

3. Items of Business

P27 Notice of Motion (Rescission) No. 11/2013 - Cr Peulich P28 Notice of Motion (Rescission) No 12/2013 - Cr West P29 Cove Hotel: VCGLR Decision Confidential Attachment P27 Confidential Minutes 25 February 2013 P29 Confidential Ordinary Council Meeting Report 17 December 2012

Special Council Meeting

12 March 2012 Agenda Item No: P27 NOTICE OF MOTION (RESCISSION) NO. 11/2013 – CR PEULICH I move, To rescind Item P13 of the 25 February 2013 Ordinary Council Meeting which makes public certain sections of the Final Bullying Report the veracity of which has been referred to investigators and lawyers for review including the apparent cover up of key testimony and evidence. Cr Paul Peulich 26 February 2013

Special Council Meeting

Agenda Item No: P28 NOTICE OF MOTION (RESCISSION) NO. 12/2013 - CR WEST I move, To rescind, at the next Ordinary, Special or Planning Committee meeting, to amend Council’s resolution of 25 February 2013 to re-exhibit Planning Scheme Amendment 128 (Mentone Junction Built Form Controls) in accordance with changes recommended. Cr Rosemary West 4 March 2013

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Special Council Meeting 12 March 2013

Agenda Item No: THE COVE HOTEL: VCGLR DECISION Contact Officer: Susan Heywood Purpose of Report The purpose of this report is to advise Council that the Victorian Commission for Gambling and Liquor Regulation (VCGLR) has granted the Cove Hotel’s application for an additional eight electronic gaming machines (EGMs), and to outline Council’s options in relation to this matter. Disclosure of Officer / Contractor Direct or Indirect Interest No Council officer/s and/or contractor/s who have provided advice in relation to this report have declared a Conflict of Interest regarding the matter under consideration. Recommendation That Council:- 1. Take no further action in relation to the decision made by the VCGLR to approve the Cove

Hotel’s application for eight additional EGMs. 2. Refer the Cove Hotel to request representatives from the Patterson Lakes / Carrum and

Chelsea / Chelsea Heights and Bonbeach Village Committees, if Council is approached by the Cove Hotel to be involved in a committee to determine the distribution of its committed $10,000 cash community contributions.

1. Executive Summary Council was notified on 15 October 2012 that the Cove Hotel would be applying for eight gaming machines in addition to the 45 currently operating in the venue. Officers consulted with the community about this matter in November 2012 and assessed the application against Council’s Gaming Policy (Electronic Gaming Machines) 2002. Council resolved on 17 December 2012 (see attachment 1 for a copy of the Council Report) to make a submission to the VCGLR objecting to the application and to be immediately advised of the outcome. Officers submitted Council’s Social and Economic Impact Assessment to the VCGLR within the required deadlines (by 24 December 2012) and the matter was then assessed by the VCGLR and heard publicly by Commissioners on 23 January 2013. On 19 February 2013 Council received notification of the decision made by the VCGLR to grant the Cove Hotel’s application (see attachment 2 for a copy of the VCGLR report). Of note in the VCGLR report is that: • The Applicant indicated that ‘it was willing to accept conditions on the approval of the

application, including a condition to comply with an undertaking to distribute the $10,000 cash community contribution as determined by a committee comprising representatives of the Applicant and the Council’.

Conclusions noted by the VCGLR in the report included that: • The Commission is ‘satisfied that the net economic and social impacts of the approval on

the well-being of the relevant community will be either neutral or positive’; • The Commission ‘imposes the following conditions having regard to the risk that the benefit

from the granting of the application will be derived by MRCi (Melbourne Racing Club; owner of the Cove Hotel), rather than the local community’:

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o The Applicant must lodge an annual community benefit statement with the Commission;

o The Applicant must comply with the attached undertaking signed by a director of the Applicant on 24 January 2013;

o The Applicant must advise the Commission as soon as the construction of the two community rooms at the premises is substantially completed. This approval will lapse if the Commission has not been advised prior to 12 months after the date of this decision that the works have been completed; and

o The Commission may extend the time during which the works must be substantially completed on request from the Applicant.

• The Commission has ‘considered the likely social and economic impacts of the proposal and, having regard to the conditions outlined above, considers that those impacts are likely to be neutral’.

Council has two options following the VCGLR’s decision to grant the Cove Hotel’s application. It can take no further action about the matter or it can appeal the decision to the Victorian Civil and Administrative Tribunal (VCAT) under section 3.3.14 of the Gambling Regulation Act (2003). If Council chooses to appeal the decision, it has 28 days from the 19 February 2013, i.e. before 19 March 2013). Council would require legal representation and this would cost approximately $25,000, and an additional $30,000 is also likely to be required to pay for expert witnesses. It is considered highly unlikely that an appeal to VCAT would be successful. 2. Background On 15 October 2012, Council was notified by Bazzani Scully Brand on behalf of Yadnum Pty Ltd (The Cove Hotel) that the Cove Hotel would apply for an amendment to its gaming licence from the VCGLR for an additional eight gaming machines in the venue. Council had 60 days from receipt of notification from the VCGLR to make a submission if it chose to. Officers consulted with the community about this matter in November 2012 and assessed the application against Council’s Gaming Policy (Electronic Gaming Machines) 2002. These outcomes and recommendations were presented to Council on 17 December 2012. In summary, the findings were that the application by the Cove Hotel did not fully comply with the objectives of Council’s policy as it would result in: • A net increase in EGMs in the municipality; • A further increase in the density of EGMs per 1000 adult population in Kingston (8.51) that

is currently above Metro Melbourne (6.22) density. However, the current EGM density for the 2.5km radius around the Cove Hotel is 4.85 per 1000 adults and this would increase to 5.28 per 1000 adults with the introduction of additional machines at The Cove Hotel; remaining below the state wide density average (6.45); and

• Further gaming access to patrons who are residents of significantly disadvantaged communities (SEIFA < state average 1022).

The community consultation consisted of a postal survey to 983 addressees, with 236 surveys returned (24% response rate). Overall, most of the respondents did not want additional gaming machines installed at The Cove Hotel, but they would be unaffected or are unsure about how they would feel if the machines were to be installed. The resolutions from the Council Meeting were that Council:

‘Make a submission to the Victorian Commission for Gambling and Liquor Regulation (VCGLR) that does not support the application by the Cove Hotel for eight EGMs and includes an analysis of the application against Council’s social policy, community consultation results, and a social impact assessment’. And

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‘That Councillors be immediately advised of the outcome of the submission to the Victorian Commission for Gambling and Liquor Regulation (VCGLR) and that it be reported to the next CIS following the decision’.

Council’s Social and Economic Impact Assessment was submitted to the VCGLR within the required deadlines (by 24 December 2012) and the matter was then assessed by the VCGLR and heard publicly by Commissioners on 23 January 2013. On 19 February 2013 Council received notification of the decision made by the VCGLR to grant the Cove Hotel’s application. (see attachment 2 for a copy of the VCGLR report). Summary of the findings noted by the VCGLR in the report include that: • The Commission notes there is a risk that the ‘majority of the economic benefit created by

the increase in revenue from the EGMs will be derived by MRCi (Melbourne Racing Club Investments Pty Ltd), rather than the community’;

• The Applicant indicated that ‘it was willing to accept conditions on the approval of the application, including a condition to comply with an undertaking to distribute the $10,000 cash community contribution as determined by a committee comprising representatives of the Applicant and the Council’;

• The Commission believes that the ‘cash contribution of $10,000 per annum to be provided by the Applicant to the community and the conditions on the approval that have been agreed to by the Applicant mitigate the risk of the application creating a disbenefit to the community’;

• The Commission notes the ‘potential for tension between the commercial interests of MRCi to generate profits for investment in the racing industry and the responsible gambling obligations of the hotel’;

• The Commission accepts that ‘some social benefit will result from the community rooms proposed by the Applicant, but considers the benefit to be nominal having regard to the limited time during which the community will be given priority access’;

• The Commission considers the ‘social impact on the community of the application to be neutral’.

Conclusions noted by the VCGLR in the report included that: • The Commission is ‘satisfied that the net economic and social impacts of the approval on

the well-being of the relevant community will be either neutral or positive’; • The Commission ‘imposes the following conditions having regard to the risk that the benefit

from the granting of the application will be derived by MRCi, rather than the local community’:

o The Applicant must lodge an annual community benefit statement with the Commission;

o The Applicant must comply with the attached undertaking signed by a director of the Applicant on 24 January 2013;

o The Applicant must advise the Commission as soon as the construction of the two community rooms at the premises is substantially completed. This approval will lapse if the Commission has not been advised prior to 12 months after the date of this decision that the works have been completed; and

o The Commission may extend the time during which the works must be substantially completed on request from the Applicant;

• The Commission has ‘considered the likely social and economic impacts of the proposal and, having regard to the conditions outlined above, considers that those impacts are likely to be neutral’.

Officers based the report to Council and submission to the VCGLR on Council’s Gaming Policy (Electronic Gaming Machines) 2002. Due to changes in the gaming industry made by the State and Federal governments in recent years it is prudent for us to update this policy. Officers will present a report to Councillors regarding this matter in the coming months.

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3. Discussion 3.1. Council Plan Alignment Council’s Social Gaming Policy relates to Council Plan Goal 3 – Healthy, Strong and Connected Communities, more specifically 3.2 ‘Strong, cohesive and engaged communities with a sense of civic pride and participation.’ 3.2. Consultation / Internal Review As part of the consultation for Council’s Social and Economic Impact Assessment to the VCGLR, consultation was undertaken with the community within a 5km radius of the Cove Hotel, local service providers and Council staff. Refer to Attachment 1 for further information. 3.3. Operational and Strategic Issues 3.3.1 Council’s possible role in the distribution of $10,000 While not listed as a condition, it is mentioned in the VCGLR report that the Cove Hotel agreed to ‘distribute the $10,000 cash community contribution as determined by a committee comprising representatives of the Applicant and the Council’. Therefore, the Cove Hotel may approach Council for support to form such a committee. Officers recommend two options should this situation arise: • The Cove Hotel consults with representatives from the Patterson Lakes / Carrum and

Chelsea / Chelsea Heights / Bonbeach Village Committees about appropriate distribution of the contributions locally; or

• The cash be donated to the Mayor’s Charitable Trust. 3.3.2 Opportunity to seek a VCAT review Council has the option of seeking a review of the VCGLR’s decision to VCAT under section 3.3.14 of the Gambling Regulation Act (2003). If Council elects to take the matter to VCAT, it would require legal representation. It is estimated that the cost of legal representation would be approximately $25,000. Potential additional costs include the hiring of expert witnesses who are likely to include a social planner, forensic accountant and community engagement specialist at an estimated $10,000 each. Therefore, the total cost of an appeal could be approximately $55,000. Council may elect to have solicitors lodge an application for review (cost of $300), and seek further legal advice in relation to this matter (reduced legal fee). A $2,000-3,000 preliminary assessment could be provided by an expert witness social planner and/or forensic accountant and/or community engagement specialist to assist solicitors to assess the likelihood of success. If it is then considered by solicitors that there is little likelihood of success, Council could withdraw its application for review. This however may result in Council incurring the legal costs of the Cove Hotel. 3.3.3 Historical VCAT decisions in relation to EGMs Only three approval decisions by the VCGLR have been successfully overturned at VCAT by Local Councils (the recent Maryborough Highland Society decision in Castlemaine, The Francis Hotel in the City of Melbourne and the Laurimar Tavern in Whittlesea). All of these decisions were in relation to applications for new venues. Legal advice received is that there has never been a case in which VCAT has overturned a VCGLR decision that was for a ‘top up’ application; that is, an existing venue seeking additional EGM licenses. 3.3.4 Preliminary Legal Advice Officers consulted with lawyers from Maddocks and received the following preliminary legal advice about taking the VCGLR’s decision to VCAT:

We re-iterate that it would be exceedingly difficult – not impossible – but very difficult to overturn the Commission’s approval on a top-up application such as this. This is in light

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of the history of such applications for review at the Tribunal and the fact that the Tribunal has never overturned a VCGLR decision to approve a top-up application.1

3.4. Options 3.4.1. Option 1 Council notes the VCGLR’s decision and takes no further action regarding this matter. 3.4.2. Option 2 Council opposes the VCGLR’s decision and seeks review at VCAT. 4. Conclusion The Cove Hotel’s application, from 15 October 2012, to vary its number of EGMs from 45 to 53 has been granted by the VCGLR. Council has the option of seeking a review of the VCGLR’s decision under section 3.3.14 of the Gambling Regulation Act (2003), however the likelihood of success is minimal. In the VCGLR’s hearing report it was also noted that the Cove Hotel agreed to ‘distribute the $10,000 cash community contribution as determined by a committee comprising representatives of the Applicant and the Council’. As such, it is possible that the Cove Hotel may approach Council for support to form such a committee. In response, representatives from the Patterson Lakes / Carrum and Chelsea / Chelsea Heights / Bonbeach Village Committees could assist in the distribution of the contributions locally. 4.1. Environmental Implications Not Applicable 4.2. Social Implications Any increase in gaming activity may affect individual savings, increase problem gambling and associated health and wellbeing issues in the community. This could result in an increased demand for counseling services (gamblers help / financial). 4.3. Resource Implications If Council elects to appeal this decision at VCAT, the anticipated costs of legal representation for Council would potentially be $55,000, and this is an un-budgeted item. These potential costs include the hiring of expert witnesses who are likely to include a social planner, forensic accountant and community engagement specialist at an estimated $10,000 each. 4.4. Legal / Risk Implications Council is required to comply with the Gaming Regulation Act (2003). Preliminary legal advice from Erin Tucker (Lawyer, Maddocks) indicates that it would be ‘exceedingly difficult – not impossible – but very difficult to overturn the Commission’s approval on a top-up application such as this’. 5. Attachments Attachment 1 – Council Report for 17 December 2012 – Trim 12/124439 Attachment 2 – VCGLR Decision and Reasons for Decision – Trim 13/17062 Author/s: Erin Pattie, Acting Coordinator Social Planning Susan Heywood, Acting Team Leader Community Engagement Reviewed and Approved By: Mauro Bolin, General Manager Community Sustainability

1 Erin Tucker, Lawyer, Maddocks, Email to Susan Heywood, 27 February 2013