17 years and still counting for hall
ACromwell memorial hall project has been under way for 17 years and cost $478,000 with nothing to show.
The length of time and cost of Cromwell’s Memorial Hall project has been examined by Australasian management consulting firm Morrison Low and will be discussed at the Central Otago District Council’s audit and risk committee on October 24.
In a report presented to a Cromwell Community Board workshop on September 28, Morrison Low raised concerns about the length of time the project had taken without tangible results and implications from a risk management perspective.
The Cromwell Memorial Hall Project has been under way for 17 years with significant analysis and professional advice sought, including seven reports prepared to date, the report says.
The community board has been involved in the process continuously and reconfirmed the preferred approach to the refurbishment of the Memorial Hall several times.
Numerous consultation and community engagement processes have also been undertaken, including two focused consultation exercises.
The project was thrown a curve ball after the local body elections last year when new board member Robin Dicey put forward a newbuild option rather than a refurbishment. It was proposed to be as a combined design build project.
In April, Dicey put forward a notice of motion to suspend work on the hall until a new-build option was investigated.
Any changes to the scope and levels of service proposed will need to be consulted on and will have time and cost implications, the report says.
‘‘There is the risk that it will reconfirm the current refurbishment approach but with the delay of two years and significant additional costs.’’
The report made several key observations including:
Council has spent in the order of $478,000 to date.
There has already been a significant amount of money invested into the design. If the scope/design changes then there is a risk that this investment is wasted.
Costs for further consultation covering the preparation of documentation, management of the process and assessment of feedback could be in the order of $100,000.
There will also be the need to consult through the LTP (2018-18) process. This will add up to an estimated two years onto the timeframes, which will flow through into increased construction costs.
Additional procurement costs for a combined design/build approach could be in order of $50,000-$100,000.
While awaiting decisions, costs are required to keep the existing facility operational.
There is a need to consider whole of life costs when developing facilities. While an option may have lower construction costs, it can often result in higher operation and maintenance costs over the facilities’ life, resulting in a more expensive overall option. ‘‘The robustness of financial information is critical. Whatever option is chosen, there is the need for good financial/cost information that council can rely upon and which is not subject to a lot of assumptions and therefore open to variations.
‘‘The financial/cost information should be at a comparable level to that which the work to date has been based upon.’’
Should the council not proceed with the refurbishment project the council would need clear, documented rationale as to why it had not proceeded as per consultation previously, the report says.
‘‘There will be the need to reconsult with a similar quality of information and level of rigour. As mentioned previously, the 17-year length of this project is unusual and there would be a high level of community expectation that the project should proceed on the basis that it has been consulted upon to date.’’
At the board workshop, it was raised an incorporated society or trust be formed to deliver the project.
‘‘The use of an incorporated society/trust to deliver projects of this nature has been used elsewhere by local government. Some of these have been successful but others have failed.’’
Before a decision could be made, detailed consideration should be given to the pros and cons.
‘‘The key issue raised previously around the need to undertake appropriate analysis and consultation is still relevant and council would need to be very clear on the reasons and benefits for using an incorporated society/ trust to deliver the project rather than council.’’
The report also noted during previous community engagement, a petition with 754 signatures, out of 4143 Cromwell residents, was presented requesting that council proceed with the refurbishment project.