Supplementary Agenda of Council

Council 5 August 2020

Item 1.1

1.1. Merimbula Ford Park Courts - Tender Negotiations Outcome

The report provides an update to Councillors on the outcome of negotiations with tenderers, feedback from the Project Control Group on scope reduction items and options to move forward with the project.

Director Assets and Operations

Officer’s Recommendation

1. That the information in the report be received and noted.

2. That Council delegate authority to the General Manager to enter into contract/s to deliver the Merimbula Ford Park Courts project and meet the $200k funding shortfall reallocating BVSC funding from other recreation and public amenities projects.

Executive Summary

In February 2019 NSW Government funding towards upgrades to the Merimbula Ford Park Courts of $1m was announced by the Hon. Andrew Constance MP. The funding followed an application by a local community group as an election commitment. An important component of the funding is to develop multi-purpose facilities that will be accessible and useable for many in the community. This will provide local clubs and users with much improved facilities. Council’s current contribution to the project is $103k of which $10k was provided to user groups to proceed with planning and development application costs. This amounts to a total project budget of $1.103m, with $1.093m available for construction.

Since the announcement, Council staff have been working with the NSW Office of Sport to formally register the project under the NSW Office Of Sport Election Commitments Program, provide detailed project briefs under the funding guidelines and work through the process of formalising funding deeds. The priority items identified for delivery under the funding deed are:

1. Resurfacing of the courts.

2. Installation of a roof structure that will provide an all-weather facility.

Request for Tender (RFT) and a negotiation process following has been undertaken. The outcomes of the negotiations with tenderers has been discussed with the Project Control Group (PCG) and feedback received from the PCG is included in this report.

Background

At the Council meeting on 24 June 2020 Council considered the report 11.2 RFT 23/20 Merimbula Basketball Courts Upgrade - New Roof & Courts Upgrade and resolved:

1. That Council decline to accept the submitted tenders under Clause 178 of the Local Government (General) Regulation 2005 and enter into negotiations with the appropriate tenderers to provide the best value for money with a view to entering into contract(s) for the new roof, concrete slab and sports lighting for the Merimbula Basketball and Netball Courts Upgrade.

2. That should the negotiations not result in a sufficiently reduced cost to meet the allocated budget a further review of the project scope, in conjunction with the Project Control Group, to find savings see the project within budget while delivering core project objectives and elements be undertaken.

3. That authority is delegated to the General Manager to execute all necessary documentation in relation to RFT 23/20.

4. That the tenderers be advised of Council’s decision.

The original project proposal which the funding announcement and funding deed is based on is for four new courts (concrete slab base), sports court surface and cover over the courts.

Additional items that have been included in the project scope and costings to see the project delivered and to take advantage of efficiencies during site works to address asset renewals or potential future site issues include stormwater drainage, preliminary electrical works (Inc. existing light poles removal), new sports lights, new fencing, additional consultancy (geo technical report and court slab design), construction certificate costs and project management costs.

As per item 1 of the Council resolution the negotiation process following the RFT has been undertaken. While there has been improvement in pricing through the negotiation process (savings $180k), in short, the total amount to deliver the project is $200k over the $1.093m available for construction.

Through the negotiation processes several options have been considered and costed to reduce the project scope. These include:

· Reducing court cover to 2 courts only. This results in a saving of $115k.

· Replacing the court surface structure with an asphalt (instead of concrete slab). This results in an estimated saving of $87k (based on unit rates)

· Reducing sports lighting to 2 courts only. This results in a saving of $26k.

As per item 2 of the Council resolution these scope reduction options were discussed with the PCG. Of the above scope reduction items, one was considered acceptable by the user groups which was the lighting reduction to 2 courts only. This has been accounted for in the in the $200k project short fall amount. The other options were considered unacceptable as they would result in not meeting the identified key project objectives. To complete those items in the future through a staged approach would add additional costs through remobilisation works and re-establishment costs.

The outcome of the PCG discussion was the PCG resolved to: Request Council exhaust all funding options, to cover the project shortfall before looking at any additional reductions of scope.

Community Engagement

Consultation undertaken

There has been project stakeholder consultation held throughout the development of the project.

Consultation Planned

If option 3 below is preferred there will need to be discussion with the Sporting Complex Project Control groups, particularly Pambula which includes the Ford Park Courts as a ‘campus’ of the Pambula Sporting Complex.

Financial and resource considerations

Identifying a funding shortfall post the formal Request for Tender process is not unusual. This can be a result of ‘scope creep’ through project development and finalising detailed project documentation and/or changed market conditions at the time of tender. Often a budget shortfall can be addressed; while maintaining delivery of core project objectives; through a negotiation phase with suitably qualified tenderers; and/or scope reductions to the project. Recent examples where this has occurred include Tathra Everyone Can Play Playspace, Tathra Headland Walk, Pambula Multipurpose Courts and Pambula Coastal Accessibility Civils Works. In these instances, while there were changes to design and scope, key project elements and objectives were able to be delivered.

Negotiation Outcomes

There were significant improvements made through the negotiation process which resulted in cost reduction of $180k. However, despite the improvement, a clear way forward was not achievable within the available budget. A summary is provided in the table below.

Project Item	$ Excl GST
Cost Post RFT Negotiations
Roof works	$749,680
Concrete works	$327,077
Sports lighting (2 Courts)	$58,581
Total RFT Works	$1,135,338

Summary Other Project Construction Cost Items
Early electrical works	$22,995
Tree removal	$600
Geotech Report	$4,490
Engineering slab design	$2,400
Court surfacing	$78,321
New fence/gates	$15,609
Project Management Costs	$33,220
Remove existing tile playing surface for re-use	In Kind
Total Other Project Items	$157,635

Total Project Construction Cost	$1,292,973
Total Available Construction funding	$1,093,000
Project Funding Shortfall	*-$199,973*

Options

Options available to Council are:

1. Council not agree to additional funding of the project shortfall.

Risk and Consequence: The project will proceed but will not align with user group expectations or deliver on primary project objectives related to court surface or court cover; OR Council make a decision not to proceed with the project which will see the current facility usability and asset renewal changes remain as they are.

2. Council reallocate BVSC funding from currently funded BVSC 2021 FY projects.

Risk and Consequence: Those projects will have a reduced budget, reduced scope or be deferred until funding becomes available. Examples of how this may occur include:

· Reducing the budget for Merimbula Boardwalk Upgrade project concept design work resulting is a less detailed project feasibility and concept plan (example reduce current $70k to $40k)

· Deferral BVSC contribution to Quaama Park Playground to July 2021 (2022 FY; BVSC contribution $45k)

· Deferring / extending delivery of the public amenities upgrade program for projects not yet commenced. (Paisley Park Eden (paths & renovation), Columbo Park Bemboka; Apex Park Bermagui) amenities to 2022 FY.

· Other options for relocation of BVSC funding may become evident as the outcome of current grant funding applications (and associated BVSC contribution amounts) are announced and project time frames are finalised. These will be reported to Council in future QBR’s. If this option is accepted Staff will continue to look at external funding opportunities to enable these projects to progress as planned.

3. Consider reallocation of Office of Sport Grant funding from the Pambula and/or Bega Sporting Complex projects, subject to agreement from the Office of Sport which have funded the projects and the project control groups for those sites.

Risk and Consequence: There may need to be a scope reduction to account a funding reduction. It could be considered as shifting the problem to another site.

It can be noted that the Ford Park Courts facility is identified as a ‘campus’ of the Pambula Sporting Complex in the adopted Master Plan. There are items included in the Pambula Sporting Complex Master Plan that may now be considered a lower priority than delivering the Ford Park Courts project. For example, the new playground (new asset $120k) included in the Master Plan may not be a priority (and could be considered over provision) noting there is a playground renewal project about to start at nearby at Pambula Surf Club reserve.

Impacts on Strategic/Operational/Asset Management Plan/Risk

Strategic Alignment

Meeting the project short fall through either options 2 or 3 (or a combination of both) to complete the project will see value in terms of efficiency in delivery (remobilising to complete an item will add cost), useability of cover over the four courts (as opposed to a scope reduction cover 2 courts), and ongoing asset management (in terms of concrete slab as opposed to asphalt). It also improves the possibility of regional events and carnivals to be held at a ‘weather proof’ site in the future, attracting sport-based tourism to the Shire.

Conclusion

The outcome of the negotiation process has put Council in a position where is close to being able to deliver a very good outcome meeting the key project objectives. However, there is a funding shortfall. There are options to meet the shortfall and deliver a project in front of Council now. These will benefit high membership sports clubs and see the project delivered well ahead of the project timeframes. However, they will impact on full delivery of other planned project scopes and / or time frames. This will need to be managed. The question is one of priority for Council, being to take a good result available now and defer risk to other projects to be managed in the future; or make a difficult decision to not meet key project objectives to enable Council to continue with other current project programs.

Attachments

Nil

Council 5 August 2020

Item 1.1

2.1. Towamba-Burragate Road tender

Question with Notice

Councillor McBain asked for an update regarding the tender for Towamba-Burragate Road.

Director Assets and Operations

Staff Response

The Towamba and Burragate roads are in total 47.4km in length, of which 25km are unsealed road (20.4km on Towamba Road and 4.6km on Burragate Road).

Both the Towamba and Burragate communities have been advocating to Council for many years to get the entire length of the Towamba Burragate Road sealed. The cost of the work to undertake this project was above the ability for Council to fund and the community were advised that external State of Federal funding would be required in order for the works to proceed.

As such there was no budget allocation or available resource to undertake any detailed design or investigation work for the upgrade of the Towamba Burragate Road and with limited survey and geotechnical information existing on roads, a high level $10m budget was set in which to seal the road based upon square meter rates of similar roads completed within the Shire and predicated on the best information currently available without the benefit extensive design and investigation work to ground truth this estimate.

The community advocated that Council actively seek NSW State Government funding to seal the road and several grants were submitted via the NSW Government, Fixing Country Roads funding stream in 2017 and 2018 which were unsuccessful.

In March 2019 Council received a one-off purpose grant of $10 million from the NSW Government for safety upgrades on Towamba and Burragate Roads as the project was in addition to Council current capital work program and all Council internal resources were fully optimised.

Council sought the services of an external Project Management and Designers via Local Government Procurement (LGP) via a Request for Quotation process and GHD Pty Ltd was commissioned by Council to provide project management, site investigation and design services for the Project.

Relative to the original project program submitted by GHD (who were engaged to take the project to the point of tender) there has been some delays to the scheduled tender date stemming from two main causes.

The first of these was impacts of the summer fires that impacted the ability of GHD to undertake site investigations for a period, as well as the need to undertake further investigations of the road to assess impacts of fire damage.

The project funding was based upon the stipulation that the upgrade is to include road sealing and resealing, pavement stabilisation, new guardrails and drainage works and improve the safety and drivability on the roads.

It was also a requirement that Council would work closely with Roads and Maritime Services (now TfNSW) to deliver the project with the stipulation that the road would be upgrades to meet a minimum standard for rural roads as specified in the current AUSTROADS design standards.

During the site investigation phase, it became apparent that meeting these guidelines would have budgetary impacts due to the site terrain, topography and narrow road corridor to deliver on all of the project outcomes.

It should be noted that simply just sealing the existing gravel road formation would not meet the requirements of the funding deed and experience has shown that simply sealing the road invariably results in many drivers driving faster, despite advisory signage or the ongoing presence of the above risks. Sealing the road may also invite additional traffic e.g.: motorcyclists.

Council staff have worked closely with GHD and TfNSW to look at various value management options in order to seal the entire Towamba Burragate Road whilst not comprising on the safety, drivability and long-term maintenance requirements of the road.

The community expectation, however, is that the primary outcome is that all the unsealed sections of the Towamba and Burragate Roads will be sealed as a result of this project. It has become apparent that there is a risk this may not be achievable for the full length, within the current funding, if the minimum design and safety standards specified in the AUSTROADS design standards are to be met.

To mitigate this risk and ensure as much as possible can be achieved it is intended to go to tender to seal the full length of road with a separable section and schedules of rates that could be used if required to vary the scope of what’s delivered but still deliver as much as achievable if there is a final funding shortfall.

In navigating the above design and value management reviews with both the funding body and GHD there has been some time delay.

The public tender process is planned to occur in September 2020, for Council consideration at the Council meeting of 28 October 2020.

Attachments

Nil

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