TOURISM NOOSA FUNDING AGREEMENT (REFERRED FROM S&O 11 APRIL 2023)

Executive summary

Tourism Noosa (“TN”) and Noosa Shire Council (“NSC”) have held a long term partnership in advancing the Tourism Industry to positively benefit the Noosa Community and region's economy. While it is acknowledged that at peak times significant visitor numbers can have a detrimental effect to the community, NSC is proactively working to manage these impacts via the development of a Destination Management Plan (“DMP”). Through this report to Council it is recommended that Council consider entering into a new funding agreement between NSC and TN. As the primary funder of TN, NSC has governance expectations in relation to the expenditure of rate payer funds and as such with the renewed agreement, there is a higher emphasis on NSC requirements, initiatives, value for money, reporting against the agreement and overall governance. The attached agreement outlines a funding framework covering current and future activities between TN and NSC. It also addresses TN’s requirement for an agreed funding quantum essential for TN to have certainty with respect to strategic planning and TN’s ongoing operations. While NSC is acknowledged as the primary funder, NSC also recognises that TN is a member based company limited by guarantee and discharges its responsibilities in accordance with its Constitution. The framework for the funding agreement contained within the attached Funding and Performance Deed, is to provide NSC elected representatives with the basis of NSC’s relationship with TN moving forward. The agreement has been drafted as a funding and performance deed, highlighting NSC’s expectations of TN to develop a strategy that aligns with key elements of NSC’s vision for the visitor economy, allow for variations to the agreement in light of NSC’s ongoing DMP process as well as more regular financial and reporting requirements by TN that demonstrate NSC’s return on investment. There are also expectations of the highest levels of internal governance and to this end NSC’s appointed Council Observer will be included in all TN Board meetings (with the exception of confidential staff matters) and TN will perform annual performance reviews of key staff and directors. Any corporate governance concerns are to be addressed firstly between TN and the Observer, and if required, between TN and the CEO and/or Mayor. It is recommended that the Council authorise the Chief Executive Officer to execute the attached Funding and Performance Deed, providing agreed funding on a 2 year basis with a 2 year option.

Recommendation

That Council note the report by the Chief Executive Officer to the Services and Organisation Committee Meeting dated 11 April 2023 regarding the Tourism Noosa Funding and Performance Deed and

1. Authorise the Chief Executive Officer to execute the Funding and Performance Deed provided at Attachment 1 to the Report;
2. Authorise the Chief Executive Officer to make minor changes to the Funding and Performance Deed as required; and
3. Confirm the release of funds as per the report for the 2024 and 2025 Financial Years.

Report

Industry Stakeholder Collaboration ▪ Demonstrated linkages with industry bodies such as Visit Sunshine Coast and Tourism & Events Queensland through various marketing and industry development opportunities.

Marketing ▪ An annual marketing plan for destination marketing activities is to be developed to attract high value travellers from intrastate, interstate and international markets. The plan will detail marketing activations, TN member co-operative opportunities, market segments, expenditure and anticipated return on investment. •

Regional dispersal throughout the Shire A regional dispersal strategy for high value travellers is to continue and progress to be reported. •

Business Events Meeting Incentives Conventions Exhibitions (MICE) market program or equivalent program to be developed, that includes NSC facilities, demonstrating high value, low volume corporate visitors with a focus on non peak days of the week and/or non peak seasons. •

Events Both parties agree to avoid any duplication of funding or expenditure in relation to “Events” (management, assessment, advisory etc) within Noosa. To avoid duplication NSC and TN will continue discussions as to the framework and appropriate event funding mechanism and this will become an Appendix to the Agreement with a focus on TN’s role in attracting high value visitors to the region. To build on the current TN event support policy, an event attraction, retention, and delivery strategy will be developed should TN’s funding of events continue whether in kind or via a grant process. •

Visitor Information Centre VIC activities to be enhanced and the implementation of Hinterland VICs is to be explored on a partnership basis with existing Hinterland businesses, along with further and diversified revenue streams. •

Sustainability Detailed sustainability program to uphold and enshrine “Noosa values” into the promoted visitor experience. The sustainability program should avoid duplication with current NSC operational and strategic activities and is to focus on concepts such as regenerative tourism. Where possible current programs are monetised to provide further revenue to TN and diversify funding streams. •

Sunshine Coast Airport Collaboration

Destination marketing activities for Noosa LGA and any product development in conjunction with Sunshine Coast Airport are to be managed by TN. •

Product development and industry training

TN will maintain a focus on sustainable product development and relevant tourism related industry training for TN members. •

TN’s role with Local Stakeholders TN will meet from time to time with business associations and other representative bodies within the LGA to identify initiatives for the visitor economy and opportunities for collaboration. •

Destination Management Plan (DMP) NSC expects that the current DMP exercise will inform its future position in relation to the management of the visitor economy and tourism within the Noosa region. By extension TN may be expected to implement aspects of the DMP which fall within its ambit as agreed between TN and Council from time to time after collaborative consultation. The funding and performance agreement will be reviewed in-line with the outcomes of the DMP with additional terms to be agreed between TN and NC when the DMP is developed. •

year plus 2 year Funding Agreement\ Funding is on an agreed 2 year plus 2 year basis with discussions to commence for future funding or extension of this agreement from 1 July 2024 and conclude via resolution of NSC no later than 31 December 2024. Negotiations will commence on the second “2 years” automatically between the parties on the basis that both have satisfied their obligations under agreement and any concerns or opportunities arising from the first term will inform those negotiations. •

Efficiency Dividend Having established a base level of funding for TN in 2023/24 ($2.52M) no further funding is provided for with the exception of: Specific projects or events agreed between NSC and TN in due course that align with TN’s strategies; and 1. An efficiency dividend as an initial Council initiative whereby identified overhead cost transfers are removed; 2. Future additional funding must be evidenced through TN sourcing it’s own operational savings through an efficiency dividend. •

Quarterly reporting to Council A key governance requirement is for TN to report quarterly to the appropriate NSC committee on expenditure by TN against the objectives under the agreement, activities being undertaken and return on investment given NSC’s funding of TN’s operations. It is acknowledged that there may be a lag on return on investment data. It is expected that TN will at a minimum, double NSC’s contribution in terms of value. TN will make other regular reports available to an appointed Divisional Head within NSC and on other significant matters directly to the CEO or Mayor as deemed appropriate. •

Workforce Planning As the principal funder of TN, NSC’s funding contribution provides significant support in staff wages and benefits. As part of this agreement TN will provide to Council a workforce plan, updated every

months detailing organisational structure, positions and overall wage expenditure and future requirements for additional staff as part of a workforce plan. •

Recognition of the Council NSC is to be recognised as the primary funder of TN. NSC protocols in relation to media, marketing, communications, community engagement, any and all events ensure that the Mayor, Deputy Mayor and Councillors are afforded the opportunity to attend in the first instance. If the Mayor or Deputy Mayor is unable to attend then the opportunity will be provided to the Council observer who is also to be recognised and invited to all events. TN is to provide opportunities for the NSC Mayor, Deputy Mayor or the Council observer to access Regional Tourism Organisation, State Tourism Organisation, National Tourism Organisation events as well as trade and industry events, inclusive of Queensland Tourism Industry Council at NSC’s cost. •

Finance efficiencies and viability, marketing reserve replenishment, organisational

review TN commits to undertaking an efficiency and effectiveness review in 2023; replenishing the marketing contingency reserve to pre-covid levels and ensuring that TN is solvent at all times. •

Alternate revenue streams TN will identify and explore revenue diversification activities; consider a tiered membership program; look at generating greater revenue from the Visitor Information Centre; and where possible pursue grant funding opportunities. •

year strategic plan – destination strategy TN commit to developing a 4 year strategic plan during 2023 that encapsulates the success elements of NSC’s funding and performance deed. •

month operational plan, with Council sign off The 4 year strategic plan is to be delivered by an annual operational plan that will require Council sign off and TN’s budget will reflect the priorities under the strategy. •

Values of Tourism sustainability, visitor experience, high value / low volume tourism TN will continue to set the direction for Noosa’s tourism industry, guiding sustainable progress to improve the visitor experience for the benefit of visitors, businesses and the local community and environment, achieving marketing strategies that attract high value-low volume visitation through targeted marketing and promotions. •

Non-compete TN commits to a non-competition policy with NSC including dispute resolution mechanisms.

Previous Council Consideration

Ordinary Meeting Minutes 18 November 2021, Item 5, Page 23 That Council note the report by the Chief Executive Officer to the Services and Organisation Committee Meeting dated 9 November 2021 and the Further Report by the Acting Chief Executive Officer to the General Committee dated 15 November 2021 regarding the Tourism Noosa Funding Agreement Review Process and

1. Agree to extend the existing funding agreement between Council and Tourism Noosa for a further term of 12 months on and from 1 July 2022 on the same terms and conditions as contained in the existing funding agreement. Noting that Council’s funding is aligned to the delivery of: i. Guiding Principles 1 & 2 “Champion the Brand, influencing improved protection and development of our visitor experience” and “ Deliver marketing and promotion which drives propensity for high-value visitation, regional and seasonal dispersal” in the Destination Noosa Strategy 2020-2023; and ii. The collaborative involvement of Tourism Noosa as one of the stakeholders in the development of a Destination Management framework, including analysis of options for Sustainable Destination Accreditation along the lines of that envisaged in Priority 4 ‘Elevate Sustainability’ of the Tourism Noosa Strategy 2017-2022 .
2. Request the Chief Executive Officer to undertake negotiations for a new funding agreement with Tourism Noosa in the second half of 2022;
3. Note that any new long term funding agreement will not commence until 1 July 2023; and
4. Request the CEO to ensure the agreement is in line with the “Proposed Process” outlined in the Tourism Funding Agreement Review Process Report to the General Committee dated 12 July 2021.

Report details

Index: ECM / SUBJECT / TOURISM NOOSA