26. 11. 97

STRATEGY AND RESOURCES COMMITTEE

PARKS AND RECREATION COMMITTEE

25 NOVEMBER 1997

A joint special meeting of the Strategy and Resources Committee

and Parks and Recreation Committee

was held on Tuesday 25 November 1997 at 10.00 am

PART A - MATTERS REQUIRING A COUNCIL DECISION

1. LANCASTER PARK FEASIBILITY STUDY RR 6664

The Director of Finance reported as follows to a joint meeting of the Strategy and Resources Committee and Parks and Recreation Committee on 24 November.

Officer responsible	Author
Director of Finance	Bob Lineham
Corporate Plan Output: Corporate Revenues and Expenses

The purpose of this report is to forward to the Committees a feasibility study which has been commissioned on the Lancaster Park upgrade proposal. The feasibility study has been separately circulated to all Councillors.

BACKGROUND

At the Council meeting on 24 September 1997 the Council approved a recommendation of the joint meeting of the Strategy & Resources and Parks & Recreation Committees that an independent feasibility study be undertaken on the Lancaster Park development proposal. The Council also resolved that the report be presented to a special joint meeting of the two Committees in November.

Coopers & Lybrand were commissioned to carry out this feasibility study and the report which they have prepared was delivered on Wednesday 19 November 1997. A copy is attached. If possible the principal author will be present at the meeting.

KEY ISSUES ARISING FROM THE REPORT

The report stands in its own right and provides a comprehensive review of the financial feasibility of the proposal developed by Victory Park Board and their advisers. Attention is drawn to the Executive Summary in Section 1, the conclusions of which are supported in the subsequent sections of the report. In particular, attention is drawn to Section VII which details the Council funding which would be required after provision of funding from other external parties. Some key points which need to be noted are:

• There is a capital funding shortfall of between $21.6M and $27.4M for the project.
• Cashflows indicate the potential for debt servicing on $16M being met from revenue.
• The Board already has $6.2M of debt leaving a maximum to remain funded by debt of $9.8M.
• Consultants recommend that club seating be sold to provide capital funding and this reduces the cashflow available for debt servicing.

GENERAL COMMENT

In view of the pressure to get this report placed before the joint sub-committee and subsequently the Council in November, it has not been possible to analyse the report in detail nor to provide a detailed commentary on the impact on the Council's financial plans if it was to agree to provide funding either by way of debt or grant to the project. An endeavour will be made to provide some preliminary analysis for presentation at the Committee meeting.

The report points out clearly that more work is needed to ascertain the likelihood of obtaining the corporate funding which is foreshadowed in the report. I concur strongly with this view as I believe it is important that the Council must have a very clear appreciation of the realistic support which will be available for this project before it makes any commitment.

A WAY FORWARD

The Mayor has requested that I place before the joint meeting a proposed resolution for recommendation to the Council as a way forward on this issue. The proposed resolution is:

1. That the Council further develop the Lancaster Park proposal by approving funding for a Project Development Chief Executive until March 1998.
   
   
2. That funding of $50,000 from the Contingency Fund be made available for this purpose.
   
   
3. That a working group of the Chairpersons of Strategy & Resources, Projects & Properties and Parks & Recreation Committees and the Director of Finance work with the Lancaster Park Steering Group to approve terms of reference for and overview the work of the Project Development Executive to be completed by March 1998.
   
   
4. That a detailed report come to the March 1998 Council meeting via the Strategy & Resources Committees as a basis of any funding decisions on Lancaster Park.

CONCLUSION

Clearly there are many questions which still need to be answered in regard to this project and time is needed for these to be adequately researched. The Council should firstly consider whether it wishes to be further involved in the project and if it does then it would be appropriate for additional work to be done before any commitment is made.

Officer's Recommendation:

That the feasibility study be received and form the basis of any further work which the Council commissions on the project. That no commitment be made to this project before further work is done which provides significant reassurance on the likely non-Council capital funding and revenue streams available for the project. That consideration be given to the Mayor's proposed resolution in order to base any future decisions on the maximum amount of information.

Because of the timing of the joint meeting, the Committees' recommendation was not available for inclusion in this agenda. The recommendation will be tabled at the present meeting.

 

CONSIDERED THIS 26TH DAY OF NOVEMBER 1997

 

MAYOR

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