Infrastructure Network Committee Meeting
Wednesday, 28 November 2018
Corner Matthews Avenue and South Road
Cr Ann Court - Chairperson
Mayor John Carter
Cr Felicity Foy
Cr Dave Hookway
Cr Sally Macauley
Cr John Vujcich
Cr Kelly Stratford
Cr Mate Radich
Member Adele Gardner - Chairperson Te Hiku Community Board
Member Terry Greening - Chairperson Bay of Islands-Whangaroa Community Board
Member Mike Edmonds - Chairperson Kaikohe-Hokianga Community Board
Infrastructure Network Committee Meeting Agenda
28 November 2018
28 November 2018
File Number: A2266844
Author: Ron Boyle, Project Manager – Water & Wastewater
Authoriser: Andy Finch, General Manager - Infrastructure and Asset Management
Purpose of the Report
The purpose of this report is to obtain approval for renewal expenditure on Oruru Hall.
· The Far North District Council published a Halls and Facilities Strategy in 2015.
· Oruru Hall is currently in a poor state of repair and has been closed for use on Health and Safety grounds.
· Seven options have been considered:
1. Do nothing
2. Demolish and rebuild
3. Demolish and not rebuild
4. Transfer the asset to Oruru Valley and Inland Association (OVIA) in its current state
5. Do minimum structural repairs and divest the hall to Oruru and Inland Valley’s Association
6. Do minimum structural repairs and provide weather tightness and divest the hall to Oruru and Inland Valley’s Association
7. Undertake a full repair to the structure and fabric of the building.
· Option 5 is the recommended option at a cost of $196,724.
· The community have expressed a wish to take on the future maintenance, renewal and operation of the hall, subject to Council undertaking a minimum level of structural repair work.
That the Infrastructure Network Committee:
a) approve the expenditure of $196,724 excl GST on upgrading work to the Oruru Hall, the work content and timing to be agreed with the Oruru and Inland Valley’s Association (OVIA)
b) approve delegation to the Te Hiku Community Board to reach agreement with the Oruru and Inland Valley’s Association (OVIA) for divestment of Oruru Hall.
The Far North District Council published a Halls and Facilities Strategy in 2015. This encourages a sustainable approach to the management and provision of community halls and buildings.
Council’s vision for community halls is:
“A network of fit for purpose, affordable community facilities that connect and support resilient, healthy and vibrant communities.”
· The strategy sets out Council’s policy for managing Council owned halls that is an enhanced status quo. The strategy also provides alternative options that will be considered on a case by case basis that include:
1. Community empowered management - with a greater role in managing the facility including prioritising what repairs and maintenance or renewal work might be scheduled.
2. Community led divestment - effectively selling the building but not the land.
3. Council led divestment of non-strategic facilities.
The Oruru Hall (Swamp Palace) is in a very poor state of repair as a result of a lack of maintenance and renewal spanning a number of years.
On the 30th of May 2018 the Te Hiku Community Board considered a report on the refurbishment of the hall. This report detailed the minimum works required to provide a safe and usable community facility.
The Community Board resolved that the item be left to lie on the table until the Board:
a) has further information to make a well informed decision
b) a review of all halls
within the Te Hiku ward during year one of the 2018-28
LTP has been undertaken which includes a full break down of all depreciation funds for each hall, condition assessment, and usage statistics where possible.
c) a communication and engagement
plan for the halls review has been
prepared and tabled to the Board.
d) no funds be spent in the Te Hiku Ward on halls until the hall review has been completed and a recommendation has been made by the Community Board.
Council had budgeted $250,000 in the 2017/2018 Annual Plan to allow for the renewal of Oruru Hall. This was not brought forward into the 2018/2028 Long Term Plan.
Various engineers’ reports into the condition of the Hall have been undertaken over the years with the most recent and relevant attached. The latest report recommended closure due to serious concerns around the structural integrity of the building. It was subsequently closed to users on 11 July 2018. The estimated cost to undertake a full repair to structure and fabric of the building and provide the hall with a further useful life of at least 20 years is $540,000.
The annual operational and maintenance costs incurred on the Hall total $22,328.This covers Insurance, Warrant of Fitness, Maintenance, with the majority being depreciation ($17k).
The capital expenditure incurred on the Hall over the last 10 years totals $58,036. This is mainly professional fees and the cost of undertaking numerous condition and other surveys.
The Oruru and Inland Valley’s Association (OIVA) have expressed an interest in the long term ownership of the hall in line with Councils Halls and Facilities Strategy. They are a small not for profit organisation, committed to the preservation and improvement of Oruru Hall.
OIVA, through their not for profit status, have the ability to raise funds for improvements and other works through not for profit funding channels.
A community meeting held on Sunday 11 November 2018 reiterated the communities’ commitment to a viable and sustainable hall. They also expressed a strong wish to take over the responsibility for the future maintenance, renewal and operation of the Hall, subject to Council undertaking a minimum level of structural repair work. They were concerned about the implication on rates should the Council fund and undertake all required repair and renewal work identified.
2) Discussion and Options
Five options have been considered for the future of the hall based on policy for managing halls contained in the Halls and Facilities Strategy:
Option one – do nothing. $2,200 ongoing annual Fire Inspections
This is not considered to be a practical option as the building is already in a significant state of disrepair, requires immediate renewal work of both a water tightness and structural nature and has been closed in the interim due to Health and Safety issues. Doing nothing will not resolve the H&S issues.
Option two - Demolish and rebuild the hall at current or alternative location. $750,000 (very approximate estimate).
Current and future demand may not support this option. Repayment of loan funding may not be achievable. Also the hall itself has significant historical importance to the community who are very keen to see it preserved.
Option three - Totally demolish the hall and not rebuild. $40,000.
This is not an option that the Community would support.
Option four – Transfer the asset to OVIA in its current state.
This option is not considered viable as there is H&S Risk and Liability to Council
Option five - Do minimum work to provide a structurally safe, usable building with no further repairs or improvements so that the hall can be divested Community Ownership (Recommended). Maximise use of available budget $196,724.
Structural fix including foundations at a cost of 196,724 (including 5% contingency) and provide technical support to community for the replacement of cladding. This would address the current structural issue. It would provide the ability for the interested community group to leverage third party funding for hall improvements and ongoing maintenance.
Option six - Do minimum to provide a structurally sound, safe and usable Facility, completing weather tightness to divest Oruru Hall to Community Ownership. $272,000 (Estimated on basis of recently received quotation)
Option seven- Undertake a full repair to the structure and fabric of the building. $540,000.
This would provide a further useful life of 20 years.
This option would require additional loan funding of $343,276 to supplement the available renewal funds of $196,724. It results in a Ward based rate increase of $3.50 or targeted 5 kilometre rate increase of $113.50.
Option 5 is the preferred option and would provide a mutually acceptable compromise for Council and the Community through a combination of Council bringing the hall up to a sustainable level then passing its ownership onto a passionate and capable community group.
This option would not include any improvements, such as addressing water tightness issues, Health and Safety issues relating to Fire Egress, and relocating toilets. These would be left for the community to address.
Divestment of the Hall would remove ongoing liabilities from Council and empower the community to take the lead in managing the Hall more effectively. However, there is still a risk that community cannot raise the required funding to repair the Hall to allow it to reopen.
This option is in line with Council’s Halls and Facilities Strategy.
Reason for the recommendation
Option 5 is a mutually acceptable compromise for Council and the Community.
It provides for urgently required major structural and renewals to occur now and eliminates further risk/cost to ratepayers along with providing opportunities for fundraising by a group responsible for ongoing improvements and maintenance.
It is a significantly lower cost to ratepayers than the currently estimated upgrade cost of $540,000.
The community are passionate about the renewal of the hall and are best placed to look after the hall moving forward.
3) Financial Implications and Budgetary Provision
Council funding for the Halls are not rated individually but as part of the overall ward rate. The Te Hiku ward rate is $308.80 per SUIP (GST Incl) for 2018/2019.
There is currently $196,724 aggregated over a number of years through depreciation funding available for renewal work on Oruru Hall.
There will be no rate impact if Option 5 is adopted. It is proposed to maximise the full budget available to undertake repairs.
It is envisioned with an appropriate divestment there would be no future financial costs to Council therefore the above maintenance and capital investigation costs would be potential annual savings to Council, and the general community.
1. Building Compliance and Fire Safety Assessment - Frank Burton and Associates - August 2014 - A2267124 ⇩
2. Structural Assessment - Haigh Workman - October 2014 - A2267129 ⇩
3. Proposed Repairs to Oruru Hall - Draft Concept Estimate - Stellar Project Delivery Specialists - October 2018 - A2267136 ⇩
Full consideration has been given to the provisions of the Local Government Act 2002 S77 in relation to decision making, in particular:
1. A Local authority must, in the course of the decision-making process,
a) Seek to identify all reasonably practicable options for the achievement of the objective of a decision; and
b) Assess the options in terms of their advantages and disadvantages; and
c) If any of the options identified under paragraph (a) involves a significant decision in relation to land or a body of water, take into account the relationship of Māori and their culture and traditions with their ancestral land, water sites, waahi tapu, valued flora and fauna and other taonga.
2. This section is subject to Section 79 - Compliance with procedures in relation to decisions.
State the level of significance (high or low) of the issue or proposal as determined by the Council’s Significance and Engagement Policy
State the relevant Council policies (external or internal), legislation, and/or community outcomes (as stated in the LTP) that relate to this decision.
Halls and Facilities Strategy in 2015
State whether this issue or proposal has a District wide relevance and, if not, the ways in which the appropriate Community Board’s views have been sought.
Te Hiku Community Board
State the possible implications for Māori and how Māori have been provided with an opportunity to contribute to decision making if this decision is significant and relates to land and/or any body of water.
Identify persons likely to be affected by or have an interest in the matter, and how you have given consideration to their views or preferences.
The Oruru and Inland Valley’s Association
State the financial implications and where budgetary provisions have been made to support this decision.
Covered in report
Chief Financial Officer review.
The Chief Financial Officer has reviewed this report