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25. 2. 98
STRATEGY AND RESOURCES COMMITTEE
16 FEBRUARY 1998
A meeting of the Strategy and Resources Committee
was held on Monday 16 February 1998 at 4.00 pm
| PRESENT: | Councillor David Close (Chairman), The Mayor, Councillors Oscar Alpers, Carole Evans, Gordon Freeman, Pat Harrow, Ian Howell, Alister James, Garry Moore, Margaret Murray, Denis O'Rourke and Ron Wright. |
| IN ATTENDANCE: | Councillors Graham Berry and Barbara Stewart. |
| APOLOGY: | An apology for lateness was received and accepted from Councillor Moore. |
| Councillor Freeman arrived at 4.10 pm, retired at 6.15 pm during the discussion on clause 2 and was present for clauses 1 and 13. | |
| Councillor James arrived at 4.10 pm, retired at 8.05 pm and was present for clauses 1, 2, 3, 4, 5, 6 and 13. | |
| The Mayor arrived at 4.10 pm, temporarily retired at 5.05 pm, returned to the meeting at 6.20 pm, retired at 6.55 pm and was present for clauses 1, 2 and 13. | |
| Councillor Alpers arrived at 4.30 pm and was present for all clauses except clause 13. | |
| Councillor Evans temporarily retired at 5.05 pm during the discussion on clause 2, returned to the meeting at 6.05 pm and was present for all remaining clauses. | |
| Councillor Murray retired at 5.05 pm during the discussion on clause 2, returned to the meeting at 6.05 pm, retired at 6.55 pm and was present for clause 1, part of clause 2 and clause 13. | |
| Councillor Howell retired at 6.15 pm during the discussion on clause 2 and was present for clauses 1 and 13. | |
| Councillor Wright retired at 8.50 pm and was present for clauses 1, 2, 3, 4, 5, 6, 13 and 15. |
The Committee reports that:
PART A - MATTERS REQUIRING A COUNCIL DECISION
1. CANTERBURY MUSEUM LEVY RR 7035
| Officer responsible | Author |
| Director of Finance | Richard Simmonds |
| Corporate Plan Output: Corporate Expenses and Revenues | |
The purpose of this report is to consider a request for a levy increase from Canterbury Museum. The Museum has recently forwarded its draft Annual Plan and Budget, together with calculations for the 1998/99 levy. The draft plan has been separately circulated to Councillors. The basic levy has increased by 5% "to contribute to further public gallery re-development".
The museum budget is a mixture of projects and routine operating costs. The table included at the back of the plan projecting budgets for future years shows an attempt to smooth the impact of capital expenditure and debt servicing by the use of reserves, loan and grants (where available). Revenues have increased by 13.6% over 1997/98 and total expenditure has only increased by 1.2% but a reduction in the funding from external sources for projects has necessitated an increase in local authority funding by 3.4%. The levy (excluding ex gratia payments) has increased by 4.7%. Last year the Museum received $600,000 from other sources, whereas this year the only non-local authority or loan funding budgeted is $200,000 from Lotto for a new computer system.
The Museum is continuing to develop its exhibition space and funding approximately half its projects by way of loan. Development projects this year are down by 12% to $1.45 million but are projected to continue in future years at approximately $1.64 million per annum. The increased debt servicing is adding to operating costs as a result of earlier decisions to use this form of finance.
The levy payable by Christchurch City Council, including the ex gratia payment agreed to last year, amounts to $2,359,719 (this will change slightly when updated population figures are received), an increase of 3.4% from the previous year. There is no increase in the two ex gratia payments.
This amount payable by Christchurch City Council is analysed as follows:
| Increase % |
Request for 1998/99 $ |
1997/98 $ |
|
| Levy due under S.15 of the Canterbury Museum Trust Board Act | +4.7% | 1,723,977 | 1,646,067 |
| Ex gratia loan funding by all contributing authorities | Nil | 160,880 | 160,880 |
| Ex gratia funding by Christchurch City Council alone | Nil | 474,862 | 474,862 |
| Total payable by CCC (representing 92.4% of the total) | +3.4% | 2,359,719 | 2,281,809 |
The Canterbury Museum Trust Board Act provides a period of six weeks for submissions if there is disagreement with the plan. Technically this period expired on 30 January 1998.
At the request of the Selwyn District Council, this Council convened a meeting of contributing authorities in December 1997 to discuss Museum funding issues. The minutes of that meeting were attached to the Committee agenda circulated to all Councillors.
| Recommendation: | That the Council approve the levy increase of $77,910 requested by the Canterbury Museum for the 1998/99 financial year. |
(Note: Councillor Harrow requested that his vote against the foregoing recommendation be recorded.)
2. CHRISTCHURCH ART GALLERY RR 7020
| Officer responsible | Authors |
| Major Projects Co-ordinator | Albert Louman, Tony Preston, Alex Davis |
| Corporate Plan Output: Corporate Plan, Volume 2, Capital Output 8.3.0 | |
The purpose of this report is threefold:
To seek the Council's adoption of the Functional Design Brief.
To obtain the Council's approval to select and engage the Project Consultants.
To obtain the Council's approval to proceed with the development of concept design drawings and the preparation of the Design Report.
1. INTRODUCTION
(a) Background
In the 1994/95 Annual Plan, the Council acknowledged that capacity and facility limitations of the Robert McDougall Art Gallery, which has served the city for the last 62 years were significant and included the Art Gallery in its major enhancement programme. It was recognised that in order to fully utilise the Gallery's collection and staff resources to contribute more effectively to the cultural life of the city, there was a need to establish larger facilities on a new Art Gallery site.
The new site was acquired in 1996 by the remarkable generosity and foresight of Trust Bank Canterbury Community Trust, which committed $3.8 million to meet the shortfall between Council funds available and the purchase price.
It is also pertinent to make reference to the number of Gallery visits. The Gallery visitor totals are excellent compared with comparable New Zealand and overseas institutions. A decade ago it attracted approximately 80,000 visitors per year - last year it peaked at over 250,000. The record is all the more impressive when the inadequacy of the present facilities is considered.
These visitor numbers should be compared against 190,000 for the Heritage Art Gallery and 35,000 for the new Art Gallery, both in Auckland.
A conservative estimate of 400,000 visitors per annum is forecast for the new Christchurch Art Gallery in its much better location, with improved facilities and enhanced programmes.
During its 1997/98 Annual Plan deliberations, the Council advanced the project by making $300,000 available for the development of a Functional Design Brief and Delivery Options Report. In May 1997 the Council approved the engagement of the Carson Group to manage the development of the Brief and most importantly to confirm the budget provision now included in the Draft Council Plan for 1998/99.
The brief development phase is now concluded with the presentation of the Functional Design Brief and the Delivery Options Report.
(b) Outline of Accompanying Reports
The brief development phase has provided the following deliverables which are separately circulated with this agenda.
Functional Design Brief:
This document contains all the information necessary to prepare a concept design. All museological, architectural and technical requirements are correctly identified. It further contains the budget.
Delivery Options Report:
This report defines how the project will be delivered following adoption of the Functional Design Brief. It also contains the timetable for the project.
It considers options for the method of selection of the consultants.
It also considers options as to how the project will be contracted out.
The report includes a recommended method for delivering the project based on the identified options and requires the Council's adoption before proceeding with the development of a concept design.
(c) Approvals to Date
The Council at its meeting held on 28 May 1997 adopted the following recommendation:
(d) Aims and Objectives
The aims and objectives for the new Christchurch Art Gallery are outlined in the Functional Design Brief. Section 2.3 on pages 11-12 refers. Subsection 2.3.2 (objectives) was reviewed and adopted by the Art Gallery (Terms of Reference) Sub-Committee on 25 September 1997.
The aims and objectives should be kept in mind when preparing the concept design for the project.
2. FUNCTIONAL DESIGN REPORT
(a) General
The Functional Design Report has been prepared to enable concept design to commence and to establish parameters for further development to the end of the design documentation phase of the project. The parameters include budget constraints, time programmes, services required as well as functional, technical and other requirements.
The presentation of the Functional Design Report concludes the brief development phase. This phase is the most critical in the planning and construction of any major project as the scope and requirements of the project are defined and costs and timelines are determined. Any errors or oversights in this part of the process will affect the project. Possible results of an inadequate brief development phase include cost overruns, construction delays and a completed facility which does not meet users' needs.
Audit New Zealand reviewed the project management processes employed for the Christchurch Art Gallery in December 1997 and reported:
"We are pleased to report that, to this point, the Art Gallery project has been managed well with a professional and comprehensive approach being adopted. In particular, sound accountability and reporting mechanisms have been established. Considerable effort is being made to define the scope of the project, and related risks, in order to identify and minimise any future problems encountered."
(b) Consultation
The development of the Functional Design Brief has involved extensive consultation with a wide range of groups and individuals. These include:
City Councillors:
A special subcommittee was formed to review and finalise the project objectives.
Gallery Management and Staff:
Nine brief development workshops were held with Gallery management and staff, as well as numerous individual meetings, to identify the functional needs of the Gallery, spatial demands and inter-relationships. Initial assessments suggested a building floor area of twice what could be accommodated within the Council established budget. Extensive work was undertaken to revalidate needs and priorities, resulting in a building size which is achievable within budget.
Council Officers:
Specialist input was received over a number of months from key Council officers including the Energy Manager, Children's Advocate, Environmental Policy and Planning Manager, Property Projects Manager, Property Manager, Parking Operations Manager, Transportation Planners, Sponsorship Co-ordinator, as well as the Major Projects Co-ordinator.
Friends of the Robert McDougall Art Gallery:
A workshop was held with the committee from the Friends. In addition the Secretary of the Friends group was co-opted onto the Project Control Group.
The General Public:
A draft brief document was prepared and made available to the general public as well as being mailed out to a wide range of special interest groups. This document outlined the broad directions for the new Gallery. It sought public input to the brief development.
In excess of 55 written responses were received commenting on the draft document, offering improvements and in every case supporting the project.
Submissions came from individuals, educational institutions, Iwi, artist groups, other public institutions and tourist focused organisations.
All submissions have been reviewed in detail, with the many proposals (often conflicting) thoroughly debated by the Project Team before inclusion or exclusion.
(c) Space, Functional, Architectural and Other Technical Requirements
The space and functional requirements are covered by Appendices iii to v included in the Functional Design Brief. Architectural and other technical requirements are covered in the body of the brief. Sections 5-12 refer.
(d) Children and Young People
In the preparation of the Functional Design Brief, particular attention has been made to providing a Gallery that will embrace children and young people in an exciting and stimulating manner.
Attention is drawn to the diversity of programmes proposed for the Gallery as outlined in Section 3.0 of the Brief. Many of these programmes are developed exclusively with children, youth and families in mind.
Attention has also been given to the special needs of children and young families in the design requirements of the Brief. Refer in particular to Section 6.10 of the Brief.
(e) Authority Requirements
The building design will be assessed as a discretionary activity limited to consideration of external appearance in relation to Worcester Boulevard. It is likely to be non notified.
Consideration will be given to the integration of the Gallery complex and the surrounding streetscape. In particular attention will be given to the Worcester Boulevard which is identified in the City Plan as a major city visitor pedestrian attraction.
Excavation and discharge of groundwater requires authority approval.
Generally the budget provides to meet the requirements of the latest version of the New Zealand Building Code.
3. CONCEPT DESIGN DEVELOPMENT
The next step after the adoption of the Functional Design Brief is the preparation of the Concept Design Report.
The Design Report is the first major deliverable of the Design Team following their appointment.
It will include options and recommendations for the building configuration including base floor plans, elevations, sections and perspectives.
It will include options and recommendations on structural, mechanical, electrical and other systems.
It will show how the new Gallery will look and will provide the graphical information that is vital to the commencement of a serious public fundraising campaign.
It will also provide confirmation that the project can be completed within the budget. In addition it will allow Gallery management to complete an assessment of the future Gallery operating expenses.
The Concept Design Report will require Council adoption before the designers will commence detailed planning and design and tender documentation preparation.
4. CAR PARKING
The site for the Christchurch Art Gallery currently provides public car parking for 265 vehicles. Development of this site for a new Art Gallery will require provision of parking for Gallery visitors and staff. In addition to this provision, the Council has requested an assessment of the need for replacement of the existing public parking which would be affected by the project.
A report is being prepared for presentation to the March round of Council committees on this issue. It will cover issues of the strategic transport situation for the area, a review of the Council's parking policies, the existing and future demands for parking in the area, comments from representatives of a number of local activities, an assessment of parking location options, and on-site options for the provision of parking.
The Council has commissioned Traffic Design Group, a nationally recognised traffic engineering consultant, to provide input to this report by way of a review of the current and future parking demands for the general area of the new Gallery site.
This study is taking into account existing Council parking policy, the impact of conservative forecasts for growth on the number of visitors arising from the new Gallery development, other public facilities in the area that are growing and placing increasing demands on limited parking (such as the Arts Centre and the Canterbury Museum), as well as the impact on parking supply resulting from the new Farmers and Hospital parking building projects.
Initial findings of this study include that the existing parking spaces on the Art Gallery site should be replaced underground on that site. The number of underground spaces is likely to be in the order of 265, but this has yet to finalised in the study.
Following very thorough geotechnical investigations of the site and review by a structural engineer, the Council's appointed quantity surveyor has confirmed that in the order of 265 spaces can be provided within the previous Council funding allocation of $6.5 million (in 1996 dollars).
It is likely that there will be a recommendation that the design concept for the Gallery should include provision for in the order of 265 underground parking spaces.
5. FURNITURE, FIXTURES AND EQUIPMENT
Considerable work has been undertaken by the project team to identify all the likely furniture, fixtures and equipment required for the gallery. This has entailed input from the gallery management, the Major Projects Co-ordinator, the architect and quantity surveyor. (The latter were engaged to assist with the preparation of the functional design brief only.)
The outcome of this work is included in the functional design brief and the project budget.
6. PROJECT BUDGET
The Council has established a budget for the Gallery of $29.3 million plus $6.5 million for the replacement of the existing street level public car parking with underground parking on the site. These figures are in 1996 dollars and exclude land costs, GST and financing. There is provision in the Council Plan for inflation from 1996 to completion of the Project in 2003.
The following capital budget provisions (excluding provision for inflation) have been made in the draft 1998/99 Annual Plan allowing completion of the project by 30 June 2003.
| 1997/98 | 1998/99 | 1999/00 | 2000/01 | 2001/02 | 2002/03 | Total | |
| Budget Provision (1996$) |
$300,000 | $840,000 | $3,000,000 | $11,700,000 | $15,760,000 | $4,200,000 | $35,800,000 |
Considerable work has been undertaken to ensure that the Functional Design Brief is aligned with the project budget. The latter includes an appropriate level of contingency.
The Gallery of 8,900 square metres gross area, plus underground car parking for 250 cars can be achieved within the approved budget.
7. FUNDRAISING
For the first time on a major project undertaken by the Christchurch City Council, a researched estimate of capital contributions has been undertaken at the planning stage. The resultant strategic fundraising plan can be woven into the project from the design stage onwards, capitalising on every facet of the project.
The total budgeted target has been raised. Careful assessment of every fundraising source clearly indicates that the revised target is realistically achievable.
Councillors' attention is drawn to the fact that public contention about a major project is likely to have an adverse impact on fundraising because successful fundraising depends on community and corporate support. Fundraising for Te Papa has been made particularly difficult in the light of adverse media comment.
(a) Current Budget Provisions
The current budget provisions as set out in the 1997/98 Annual Plan are as follows:
| 1998/99 | 1999/00 | 2000/01 | 2001/02 | 2002/03 | Total | |
| Current Budget Provisions (1996$) - Sponsorship - MCK Richards Trust Total Current Budget Provisions (1996$) |
(750,000) |
(4,000,000) |
(4,000,000) |
(8,000,000) (750,000) ($8,750,000)
|
Note: the current budget provisions are in 1996$ terms.
(b) Proposed Budget Provisions
The proposed budget provisions are as follows:
| 1998/99 | 1999/00 | 2000/01 | 2001/02 | 2002/03 | Total | |
| Proposed Budget Provisions (1996$) - Sponsorship - MCK Richards Trust - Fundraising Expenses Total Proposed Budget Provisions (1996$) (including provision for inflation) |
92,000 |
(3,000,000) 190,000 |
(750,000) 200,000 |
(2,500,000) |
(3,000,000) |
(8,500,000) (750,000) ($9,250,000) 482,000 (8,768,000) |
Notes:
8. COMMERCIAL OPPORTUNITIES
In keeping with the Council approved project objective to `provide quality revenue generating facilities that add to the exciting ambience of the Gallery, without compromising its primary function', a commercial study has been completed that confirms the financial viability of providing a permanent Gallery Gift Shop, Cafe, Licensed Brasserie and Print/Framing/Photo Shop.
There is also revenue to be gained from a range of secondary, short-term opportunities such as leasing out the foyer for functions, auditorium, workshops, kiosks and other retail opportunities.
All these opportunities will provide a forecast net annual revenue of over $250,000 to the Gallery from opening in the year 2003 onwards.
The space needed to accommodate these compatible and sustainable commercial opportunities has been included in the functional design brief and project budget.
9. PROGRAMME
A proposed development programme is included in the Delivery Options Report. It is based on a single main building contract, reflects a cashflow as provided for in the draft 1998/99 Annual Plan and shows a projected completion for a summer 2002/03 opening.
10. SELECTION OF CONSULTANTS
The selection of consultants forms the main thrust of the Delivery Options Report. This report discusses a number of options open to the Council for the procurement of professional design services. Consultants can be selected by any of the following means:
The report recommends the following:
Selection of a Project Manager:
Selection of Design and Cost Consultant:
Selection of the appropriate consultants is one of the most important decisions the Council makes. The success of any project often depends upon obtaining the most able, experienced and reputable consultant who can demonstrate that the firm can undertake this scale and type of project and has the availability within the firm of specific resources of proven ability and experience which can be utilised on the project.
The recommended selection process (a two stage process of pre selection followed by tenders from a selected shortlist) was successfully applied to the selection of consultants for the WestpacTrust Centre and received acclaim, even from the non successful bidders.
The recommended selection process includes the following steps:
Other most important skills by which to judge consultant's suitability to carry out the project are:
11. CONSTRUCTION CONTRACT - DELIVERY OPTIONS
The Delivery Options Report prepared by Carson Group South Island Ltd includes a section on construction delivery which covers the type of contract and the payment method.
A normal procedure of choosing a contractor by inviting selected tenderers to submit bids based upon completed documentation is recommended. Thus the contract price, excluding post tender escalation and Contingency Sum expenditure, will be known to the Council before the building works are committed.
12. PEER REVIEW
Following a recommendation by Audit New Zealand last year, an independent peer review has been undertaken on the Draft Functional Design Brief completed last November.
This peer review was completed by Ken Gorbey from the Museum of New Zealand. Mr Gorbey is a highly respected museum and gallery professional. While independent of the brief development team, he is familiar with Christchurch's need for the new Gallery as outlined in his report to Council in 1991.
The peer review identified the need for the brief to be further developed in the areas of proposed gallery programmes after opening and the commercial return opportunities.
These identified areas have been worked on by the Brief Development Team since November and have been incorporated in the reports circulated with this agenda.
| Recommendation: |
|
| 3. | CHRISTCHURCH SYMPHONY ORCHESTRA - BANK GUARANTEE | RR 7036 |
| Officer responsible | Author |
| Director of Finance | Richard Simmonds |
| Corporate Plan Output: Corporate Expenses and Revenues | |
INTRODUCTION
A request has been received from the General Manager of the Christchurch Symphony Orchestra (CSO) for the Council to guarantee an increase in the CSO's overdraft with the ASB bank from $40,000 to $100,000.
A separate request has also been made to increase the Council's contribution from $200,000 per annum to $300,000 - the latter sum to be a "cap on CSO funding from the Council for the foreseeable future".
This report provides some background to the CSO's financial position, and makes recommendations regarding further financial assistance.
FINANCIAL POSITION
Various discussions have been held between Councillors and staff with the CSO General Manager regarding funding issues and budgeted cash flows for the forthcoming period.
A difficulty the CSO faces is the lack of certainty of funding from year to year, and the risk of some programmes during the year being financially unsuccessful. This variability of income, combined with an increasingly fixed cost structure (as the proportion of tenured players increases), significantly increases the risks facing the CSO and, by implication, its guarantors.
Arguably, some decisions taken last financial year by the CSO were over-ambitious in the light of their relatively precarious financial position. These included an increase in the number of tenured players (as opposed to those paid on a casual basis as and when required), substantial pay rises for the orchestra and the purchase of a set of timpani for $54,000 - half of which is still to be paid. Additionally a budgeting oversight meant that there are potential further expenses in connection with the tenured players. This increased expenditure, combined with some concert losses in the last quarter of the year, has presented the CSO with some major cash flow difficulties for 1998.
A cashflow forecast was provided with the request for the overdraft guarantee. Subsequent examination of the forecast has revealed some inconsistencies indicating that the cash flow position is even worse then anticipated. It appears that even increasing the overdraft limit to $100,000 would be insufficient to cover cash outlays based on the current budget assumptions. Consequently the CSO General Manager is now taking active steps to cut costs. Once agreement has been reached on these cost-cutting measures, which are designed to trim a further $100,000 from the operating budget, a revised cash flow forecast will be produced.
THE COUNCIL'S POSITION
The above circumstances place the Council in a difficult position. On the one hand, realistically it cannot let the CSO cease to be a going concern through refusal to provide assistance. On the other, it is unreasonable for the Council to be presented with a request at such short notice to provide financial support, without having had any input or consultation regarding the decisions that have led to this situation arising. In view of this the following recommendations are made.
| Recommendation: |
|
| 4. | COUNCIL INVOLVEMENT IN BERTELSMANN FOUNDATION CHILDREN'S PROJECT | RR 7044 |
| Officer responsible | Author |
| City Manager | Vicki Buck and Mike Richardson |
| Corporate Plan Output: Children's Advocacy | |
Together with Councillor Close and Kerry Marshall, President of Local Government New Zealand, we attended a Bertelsmann Network Symposium in Farum Denmark last September. At the Symposium the work undertaken in the Network during the previous 12 months was presented and discussed. The English language versions of this work are being published progressively.
In a workshop following the Symposium the proposal of the Bertelsmann Foundation to widen the scope of future work so as to include elected members and issues of particular interest to elected members was widely supported. As a result of this it is intended that the next cycle of work undertaken in the Network (which will run for either 2 or 3 years) will focus on three community issues. In each of these areas a case bank of innovative ideas and successful projects will be developed with both contributions to the case bank and taking up ideas from it encouraged throughout the local government industry. As a separate exercise, work will continue within the Network on identifying the general lessons which can be learned from such successful projects.
The vision, therefore, is for the 11 Network cities to form the core for the next project cycle, but for many other cities and organisations such as Local Government New Zealand to be increasingly drawn into active participation. The Bertelsmann Foundation has undertaken to continue to finance the Network for three years.
It was agreed in Farum that the three community issues on which work would be focused would be: Children and Youth issues, senior citizen issues and employment issues. The following is an extract from the Bertelsmann Foundation's summary of the outcome from the workshop held in Farum:
"WHERE SHOULD WE GO: THE OBJECTIVES OF THE NEXT CYCLE
The main issue of the next cycle of work, it was agreed in the conference in Farum, is moving from internal to more external focus.
Local government, as the democratically elected local body, is in a unique position to foster democracy, social cohesion and the delivery of high quality services. Not necessarily delivering the services itself, the local authority plays a central role in guaranteeing the services and bringing the local partners together.
This means building the services, steering systems and working methods more from a demand point of view, listening to and involving the citizens and the community at large in developing the vitality of the region and the quality of services.
We agreed that this calls for new competencies in strategic management. We called it "smart networking" to emphasise the need for sustainable and long-term partnerships and results. This is a challenge not only for the public, but also the private sector. Both have a lot to learn from each other and we must be open to best practices wherever they are encountered.
So in the next cycle of work our main objective is to move from internal to more external focus by developing new competencies in strategic management and engaging the social partners and the community in a better co-learning and joint value creation process.
HOW TO DO IT: BUILDING A CITY OF TOMORROW
Describing the challenges of cities in the global competition, Borja and Castells, two internationally respected urbanists, state the following: "In the long run, the most competitive cities in international terms are those offering the best quality of life to their inhabitants."[1]
On this basis and with this general aim we want to find a natural, interesting and challenging entry point for each city in the next cycle of work.
In the discussions in the Farum conference it was initially agreed that this could be done by identifying challenging and topical issues, within which we could develop and explore strategic management and the co-operation between politicians, administration and the community at large. We would utilise to a maximum amount the work already ongoing and done in the topic areas in the cities and use to a maximum amount also the experience of others.
The suggestion is that the cities would subscribe into one of the three main topics and engage in joint problem solving in the next work cycle towards the Third Conference in Tilburg 1999. The details of the projects in the respective themes will be worked out by the participating cities with the help of co-ordinating and lead city effort.
Initially the three main topics were identified and now we ask each and every city to subscribe and commit to one of these. There is nothing to stop a city in participating and contributing in the other two themes - it is up to their resources - but we are asking for a definite primary commitment.
BUILDING OUR CITY INTO A GOOD PLACE FOR CHILDREN AND YOUTH
Problem statement: Children and youth are our future. But our cities can have dangerous and unattractive places for children. There is a decline in participation in public affairs especially among youth. We need to look at our cities with the eyes of children and youth and ask ourselves: is this a good place to live and grow in? Are we listening to the - often weak- signals from them? Are we tapping into their creativity and vitality? The children and young are not only a challenge or a problem, they are a vital resource and it is our job to create ways of harnessing it, of finding ways for communication and participation.
Cities interested in this topic could each have their own focus and angle on children and youth. With the help of a co-ordinating lead city, the cities would form a cluster to exchange experiences and engage in joint problem solving from the viewpoint of strategic management. The cluster can also include other cities outside the core network.
Lead city to co-ordinate the cluster: The city of Christchurch has initially expressed willingness to act as a lead city in this cluster.
BUILDING OUR CITY INTO A CITY OF WORK, EMPLOYMENT AND COMPETITIVENESS
Problem statement: Many cities are faced with problems of unemployment, public safety and social exclusion. In dealing with this employment, economic development and competitiveness are the engines of wealth.
We must mobilise all partners in an effort to vitalise the city, to create jobs and opportunities, to fight unemployment, poverty and social exclusion. We must open our doors and minds for participation, joint effort and joint value creation between the council, private partners and the community at large.
Cities interested in this topic could each have their own focus and angle on employment, combating unemployment and social exclusion and developing competitiveness. With the help of a co-ordinating lead city, the cities would form a cluster to exchange experiences and engage in joint problem solving from the viewpoint of strategic management. The cluster can also include other cities outside the core network.
Lead city: The city of Phoenix has initially expressed willingness to act as a lead city in this cluster.
BUILDING A CITY INTO A GOOD PLACE FOR SENIOR CITIZENS
Problem statement: Most of the cities are faced with a strongly ageing demographic structure and hugely rising costs in elderly and health care. Just like a good measure for the humanness of the city is how it treats children, is how it treats the senior citizens and elderly. The senior citizens are not only a problem, they are a vital and experienced resource, who can also help us in bettering the quality of life of those, who need more care and nursing. They can also help us develop our local culture, vitality and services, and give us new ideas. We must look at our city with the eyes of the senior citizen and elderly - what can be done to make this an attractive and safe place for them?
Cities interested in this topic could each have their own focus and angle on senior citizens and elderly care. With the help of a co-ordinating lead city, the cities would form a cluster to exchange experiences and engage in joint problem solving from the viewpoint of strategic management. The cluster can also include other cities outside the core network.
The city of Hämeenlinna, Finland, has initially expressed willingness to act as a lead city in this cluster.
REQUIREMENTS: WHAT DO WE COMMIT OURSELVES TO?
Commitment of the Council to one of the Themes
We need clear commitment and development in the co-operation of politics and administration. This is why we ask you to discuss this plan for the next cycle of work in your council and in your administration and subscribe to a theme of your primary interest:
1. Children/Youth
2. Employment
3. Senior Citizens
by the end of January 1998. You are free to participate also in the other themes according to your possibilities.
On the basis of the commitments the co-ordinating team and the lead cities will form the working clusters.
Participation and Networking
We need good co-operation with the citizens and other partners. We need the maximum participation of our focus groups, children, unemployed, the elderly, the community. We also need to broaden the base of the cities in the network effort. This is why we ask the city to commit to a participate, open, networking way of operating both in terms of their own citizens, administration and elected members, extra expertise and national and international contacts to other cities.
Willingness to Learn and Implement
Nobody has ready made solutions to the problems at hand. We must be open to new ideas and best practices and must make an effort to implement them in practice. This is why we ask the city to commit to a learning attitude, willingness to experiment, develop and try out new ideas and methods.
Continuity of Effort
Problem solving, especially in an international context on challenging issues, calls for continuity in the commitment. This is why we ask the cities to guarantee a continuity in the project personnel and effort and to guarantee a necessary amount of documentation and evaluation. We ask the city to name a contact person and designate a task force in the response to this invitation.
WHAT CAN WE GET OUT OF THIS?
Clearly, the network stays alive only as long as it is an interesting learning experience, as long as it adds value to the practical problem of the cities.
The next work cycle can do this by offering a unique opportunity to learn through joint problem solving on how to handle challenging issues. Issues we have to face anyway. This is not extra work, this is better problem solving.
The network will offer a unique opportunity to tap into the expertise of some of the leading international specialists in the field.
The network offers co-ordinating and facilitating help through a team made up of lead city representatives, experts, consultants and Bertelsmann experts.
The network offers, with the help of the Bertelsmann Foundation, a vehicle for international visibility, a possibility for the cities to promote their reputation as a dynamic city .
The Bertelsmann Foundation offers to support the effort with seed money and practical assistance.
REPLY EXPECTED BY THE END OF JANUARY 1998
Commitment of the Council to one of the Themes
Guaranteeing:
Participation and networking
Willingness to learn and implement
Continuity of effort and designation of a task force
We ask the cities to give a statement of commitment, quoting a council decision and other appropriate statements, by the end of January 1998 to: The Bertelsmann Foundation xxx."
The Bertelsmann Foundation regards it as important to secure formal Council resolutions for involvement in this next cycle of work. The Foundation sees that the "champion" of the work orientated towards community issues should be the elected members of the Council rather than the staff organisation and while it is recognised that the electoral process may not permit continuity of contribution from specific individuals over a two or three year period, the Foundation is anxious to ensure that the Councils remain committed to the process. (Part of the background to this has been the failure of one of the Councils during the last cycle to deliver on some key inputs which it had undertaken to provide to a project.)
In practical terms the project on Children and Youth would likely shape up as follows:
Christchurch City Council would establish a World Wide Web site. This would provide a promotional vehicle and "post box" for assembling cases. Using our own networks (particularly those of our Children's Advocate) and those of Local Government New Zealand we would establish a "regional" cluster of people enthusiastic to participate in the project and to submit cases and experience. (In this context, the "region" includes Australia and US.)
A workshop would probably be held in Christchurch during August 1998 to which contributors to the case bank would be invited. Also invited would be one or two children's "experts" who would be contracted to work on the Children's Project throughout its duration, and a Dutch based consultant who is a member of the Network and has been assigned by the Bertelsmann Foundation to help coordinate the transfer of learning between an English language based cluster assumed to be in Christchurch and parallel clusters likely to be based in Denmark and Holland.
The most interesting cases and projects from the Christchurch cluster would be taken to a workshop, likely to be in September or October, where these cases could be set alongside similar ones from Denmark and Holland. At this stage, it might also be possible to learn from the progress made on the other two issues. As a result of the discussions at this international workshop agreement would be reached as to what types of ideas and examples to look at in more depth. If possible, it is hoped that each Council would also consider for implementation some of the ideas gathered through the process. In terms of the community issues, therefore, the second part of the cycle, during 1999, would focus on implementation of projects.
The Bertelsmann Foundation has a budget of almost $2M for this cycle of work. The exact shape of the projects and the way in which this money will be allocated will be progressed by the Network during March. We can be confident that the Network would fund all costs associated with travel and accommodation in attending meetings and a symposium. It is our intention to also seek recovery of Christchurch's costs associated with establishing and administering a "cluster" and case bank. The Bertelsmann Foundation has indicated its enthusiasm for funding two "experts" who would probably visit Christchurch at least once, if not twice, during the cycle. It must be recognised, however, that a certain amount of elected member and staff time will need to be put into the project. The philosophy underlying this cycle of work is for each Council to chose an issue on which it will be working in any event and to provide it with opportunities for ideas and learning which would otherwise not be available. Support to the project at a management level would be provided by the Director of Policy and the Children's Advocate.
| Recommendation: |
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5. MANAGEMENT OF CENTENNIAL AND PIONEER POOLS RR 6844
| Officer responsible | Author |
| Director of Policy | Jonathan Fletcher |
| Corporate Plan Output: Pools | |
The purpose of this report is to enable the Council to determine how it wishes to manage the new Centennial and Pioneer Pool Complexes.
INTRODUCTION
The Mission Statement of the Council's Recreation and Sports Policy is "the Christchurch City Council is committed to making a significant sustainable contribution to the quality of life of its residents, particularly its children and youth, by supporting a broad range of recreation and sports services, facilities and programmes". The Recreation and Sports Policy goes on to state: (i) that Council is committed to providing services, facilities and programmes where there is a proven need and no other provider exists; and (ii) it is also committed to ensuring that access to recreation facilities is available to disadvantaged groups and that "children, youth, people with disabilities and people on limited incomes" have access to and are increasing their participation in a broad range of recreation and sporting activities.
The Council has undertaken the building of the Pioneer and Centennial swimming complexes in pursuit of this policy. I interpret this as meaning that the pools will be successful if, cost effectively, their operation results in more people using swimming pools more often and, in particular, if people who are currently not regular swimmers or participators in other active physical recreation use the facilities frequently and enjoy them.
THE THREE OPTIONS
As a result of the joint Parks and Recreation and Strategy and Resources Committee seminar held in November last year there was agreement that there are three clear alternatives for the management of the pools. These three options are
(i) Seek requests for proposals for the management of Centennial Pool.
This option involves seeking bids from private sector operators and an in-house bid for the operation and management of the Centennial Pool complex in its entirety, while providing for the Pioneer Pool complex to be operated in-house.
(ii) Manage both Pioneer and Centennial Pool in-house. This option would provide for the overall management, marketing and operation of both new pools to be brought under the wing of the Council's pool operating team alongside QEII and the outdoor pools. Where appropriate, elements of the operation could be tendered out (for example the cafeteria, the solarium, the gym).
(iii) `The Town Hall Board' Model. This option involves establishment of a special committee comprising both elected members, and non-elected members with expert knowledge of finance, administration and marketing, to complement the in-house staff skilled in the operation of swimming pools. The special committee would be responsible to the Council via the Parks and Recreation Committee for the achievement of agreed financial and social targets. The staff team responsible for swimming pools would report to the special committee in the same way that the teams responsible for other outputs report to standing committees.
Seminar participants did not support contracting out the operation of the Pioneer pool primarily because this pool is a local community facility that is an integral part of the Pioneer recreational complex. It was viewed as impractical, and of no benefit to the Council, to either contract out the operation of the pools without the rest of the complex, or to contract out the operation of the entire Pioneer recreational complex.
At the seminar I was asked to arrange for a "straw poll" of all Councillors on their preferences from these options. The result of this poll is that of the nine responses I received five favoured the option of managing both Pioneer and Centennial in-house, three favoured seeking requests for proposals for the management of Centennial Pool; and one favoured moving to the Town Hall Board model.
Comparison of In-house and Contract Management
| In-House | Contract Management | |
| Benefits (Yellow Hat) |
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| Disadvantages (Black Hat) |
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| Overcoming the disadvantages (Green Hat) |
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The strengths of the `Town Hall Board' model are: it provides for a single purpose special committee including non-elected experts to be responsible for achieving the targets set for the Council-operated pools; and at Council Committee level it separates standards setting and performance monitoring (the Parks and Recreation Committee) from operational responsibility (the swimming pool special committee). The contrary view to this is that the Council through the Parks and Recreation Committee is responsible for setting and monitoring performance standards and that the staff responsible for managing and operating the pools should report directly to the Parks and Recreation Standing Committee not via an intermediary special committee. Where specialist financial, administration or marketing expertise is required then the manager responsible for the pools should obtain it.
DISCUSSION
There is no "right" management option for ensuring that the swimming pools are a success. As was discussed at the seminar the survey of practice undertaken as part of the study into the options for managing and marketing Christchurch City Council's swimming pools was inconclusive. Slightly more of the comparable facilities were operated in-house than were leased, and the subsidies per patron for the leased facilities were on average slightly lower than the subsidies for the in-house operation. Perhaps the best assessment of the results is to say that they support the, rather obvious, conclusion that it is the quality of the management, marketing and operation that is important, and that either good in-house or good contract management arrangements will work.
Whichever option is chosen, in order to ensure clear lines of accountability for the setting and achieving of swimming pool performance targets, within the Council organisation the role of advising on policy and commissioning should be clearly separated from the role of swimming pool operation. To achieve this there should be:
The quality of the swimming facility has an enormous impact on levels of use, with patronage tending to decline as facilities age and date. The Council therefore needs to ensure that its asset management programme and funding is sufficient to ensure ongoing high quality facilities and to provide for enhancements where appropriate.
Seeking requests for proposals for the operation of Centennial Pool, carries with it costs over and above those resulting from moving to in-house operation. Costs include the legal and other work involved with the drawing up of the contracted bid documents, the setting out in a legally accepted form the performance measures to be applied to the contract, and the costs of evaluating and deciding on the proposals received. There are also the costs associated with preparing an in-house bid. Estimating these costs at this stage is difficult but a very approximate estimate is that they could be of the order of $50,000 - $60,000.
It is confidently expected that the two new swimming pool complexes will generate sufficient revenue to provide a small operating surplus. However they will not cover their capital and depreciation costs. In terms of the total cost of owning and operating the swimming pools the Council is faced with a balance between the level of cost recovered from user charges and the extent of ratepayer subsidy. In order to minimise the ratepayer subsidy and achieve the Council's recreation objectives, the Council needs a well motivated operator dedicated to finding creative ways to maximise customer numbers and the use made of the facilities.
Evidence from the survey of other facilities is that all had a mix of wet and dry activities (e.g. gym, weights and circuits, solarium, aerobics, cafeteria and shop) and that the dry activities significantly improved the financial viability of the complex. This enhancement comes from both the profitable financial returns of the dry activities and from the way they complement the "wet" facilities to improve the total recreation experience of users of the complex. It is essential that these dry facilities are managed in a way that ensures that they provide a good financial return to the complex as a whole. Under in-house operation some of these facilities could be contracted out. All such contracts should ensure that the Council gets a good financial return.
The Centennial Pool complex when it opens will be a new, up to the minute, swimming facility in the central city and therefore easily accessible to many people. It may therefore be considered as the "jewel in the crown" of the Council's sizeable investment in swimming facilities for Christchurch residents. A consideration in deciding whether to seek requests for proposals for this pool complex is whether the Council is comfortable with operating most of its swimming pools itself but having others operating its prestige central city facility on its behalf.
SUMMARY
The main advantages of contracting out the Centennial Pool operation are: that it enables the Council to know in advance what its net cost of owning the pool will be; and that contracting out is likely to provide for financially motivated and dedicated management of the facility.
The main advantages of in-house operation are: the internal synergies that result from having a very significant swimming pool operation and management business within the Council; an ability to comprehensively and integrally market the swimming pools across the city; and the greater flexibility that in-house operation gives to the "fine tuning" of swimming activities in order to best achieve Council's wider outcomes.
| Recommendation: | That the Council:
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