report for confidential meeting of council...confidential meeting of council – 11 september 2018...

Confidential Meeting of Council – 11 September 2018 of 13

REPORT FOR

CONFIDENTIAL MEETING OF COUNCIL

MEETING DATE

11 SEPTEMBER 2018

RECORD NO: D18/51673 REPORT OF: ORGANISATIONAL SERVICES & EXCELLENCE TITLE: RICHARDSON RESERVE - FOOTBALL FEDERATION

SA - FUNDING AGREEMENT - PROPOSAL 1. That pursuant to Section 90(2) of the Local Government Act, 1999 the Council orders that

the public (except staff on duty) be excluded from the meeting to enable discussion on the Richardson Reserve - Football Federation SA - Funding Agreement - Proposal.

2. That the Council is satisfied that pursuant to section 90(3) b (i) and b (ii) of the Act, the

information be received, discussed or considered in relation to this item is: a) information the disclosure of which:

o could reasonably be expected to confer a commercial advantage on a person with

whom the council is conducting, or proposing to conduct, business, or to prejudice the commercial position of the council; AND

o would, on balance, be contrary to the public interest

as disclosure would directly impact on Council’s ability to negotiate the best value and outcome for the community.

3. In addition, the disclosure of this information would, on balance, be contrary to the public

interest. The public interest in the public access to the meeting has been balanced against the public interest in the continued non-disclosure of the information. The benefit to the public at large resulting from withholding the information outweighs the benefit to it of disclosure of the information.

4. That the Council is satisfied that the principle that the meeting should be conducted in a place open to the public has been outweighed in relation to this matter by the need to keep the discussion of this matter confidential because it may prejudice Council’s ability to be able to negotiate a cost effective outcome for the benefit of Council and the community.


PURPOSE To consider a proposal received from Football Federation SA (FFSA) to enter into a funding agreement to complete the installation of 2 Synthetic Pitches and associated site works at Richardson Reserve.

RECOMMENDATION

Option A 1. That Council having considered the report entitled “Richardson Reserve

– Football Federation SA – Funding Agreement – Proposal” and dated 11 September 2018 authorises the Chief Executive Officer of Council (CEO) to accept the offer from Football Federation South Australia (FFSA) detailed in Attachment 1 of the report subject to the CEO negotiating and executing an agreement including a termination at convenience clause to allow for Council to terminate in the event that the project scope is reduced due to other constraints.

2. The basis of accepting this offer includes:

a) The works could commence before 31 October 2018 resulting in likely completion of the works early in the 2019 soccer season commencing and therefore avoiding Club relocation issues.

b) There is limited specialty in the market place for these types of works that could deliver both synthetic pitches and building works for community clubs as part of the one project.

c) In the event construction work may require Council to relocate Modbury Vista Soccer Club for a short term period, FFSA (as sports peak body) would need to be engaged to assist facilitating this process with Council, therefore by project managing the whole project this can also be included in the scope.

Or


Option B

1. That Council, having considered the report entitled “Richardson Reserve – Football Federation SA – Funding Agreement – Proposal” and dated 11 September 2018 declines the offer from Football Federation South Australia detailed in Attachment 1.

2. The basis for declining the proposal includes:

a) Inability to properly assess value for money without an open tender process

b) Potential concern from other suppliers and perceptions of favourable treatment of the proponent


RETENTION OF CONFIDENTIAL DOCUMENTS

1. That having considered the agenda item entitled Richardson Reserve - Football Federation SA - Funding Agreement - Proposal and dated 11 September 2018 in confidence under section 90(2) & (3) b (i) and b (ii) and Section 91(7) of the Local Government Act 1999:

information the disclosure of which: o could reasonably be expected to confer a commercial advantage on

a person with whom the Council is conducting, or proposing to conduct, business, or to prejudice the commercial position of the Council; AND

o would, on balance, be contrary to the public interest the disclosure of the included information would directly impact

Council’s ability to negotiate the best value for money for the community.

The Council pursuant to section 91(7) of the Act orders that the report (including attachments) and minutes relevant to this item be retained in confidence with the exception of those third parties impacted by or involved in negotiations and potential outcomes until:

and that this order be reviewed every 12 months at a minimum (if the confidentiality period is longer than 12 months in duration) or until the Council resolves otherwise, whichever occurs first.

2. That the Council gives the power pursuant to Section 91 of the Local Government Act 1999 to the Chief Executive Officer to revoke the order made under Section 91 (7) of the Local Government Act 1999 subject to the Chief Executive Officer consulting with the Mayor and reporting to the Elected Members of the revocation.


1. BACKGROUND

On 14 August 2018 Council resolved:

That Council, having considered the report entitled “Richardson Reserve, Wynn Vale Draft Master Plan” and dated 14 August 2018, adopts Option C concept design, subject to final design, as provided in the report as the Master Plan for the Richardson Reserve redevelopment with a total cost for stages 1 & 2 only estimated to be $6.513m

1. “That having adopted the Master Plan for Richardson Reserve, the project for stages 1 and 2 only be delivered in consultation with the Modbury Vista Soccer Club including:

Stage 1 (likely completion date) in 2018/2019– Development of two Synthetic Soccer Pitches, subject to approval to change the State Local Government Partnership scheme grant conditions, with a total budget allocation of $2.994m

Stage 2 (likely completion date) in 2020/2021 – Development of Facilities including change rooms, function/community room and storage facilities with a total budget allocation of $3.519m

2. That Council authorises the Chief Executive Officer to negotiate to amend the State Local Government Partnership scheme grant to allow for the allocation of funds to complete Stage 1 and that the Chief Executive Officer be authorised to sign any required documents.”

. In 2016-17 Council upgraded its pitch at Jet Park, Modbury now known as Smith Partners Stadium, Modbury. These works were completed by FFSA on behalf of Council following Council authorising the Chief Executive Officer (CEO) to sign the appropriate funding/works agreement with the Football Federation SA, to protect Council’s interest in the asset. This project delivered a high quality outcome for the Club and our community. Following completion of these works Council has continued to have active discussions with FFSA in relation to our synthetic pitch locations and options for project management. However funding has not been available to date to complete these works until Council recently resolved to upgrade Richardson Reserve.

2. DISCUSSION

On 29 August 2018 Council received a letter from the CEO of FFSA in relation the proposed upgrade of Richardson Reserve. The letter included details a proposed funding agreement whereby Council would fund FFSA to develop the Richardson Reserve.


The following table summarises the findings against the Council’s evaluation criteria for unsolicited proposals. Evaluation conducted 3/9/2018. Panel:

Nigel Dennis, Manager Recreation and Leisure Services

Chloe Oborn, Recreation Planning and Facility Coordinator

Sharon Hollamby, Manager Procurement and Contract Management

Principles for Council to have regard to

Comment

Community Need/Council Priority

Council considered the report entitled “Richardson Reserve, Wynn Vale Draft Master Plan” dated 14 August 2018

Value for money

What is sought from Council? (financial support, assets, legislative/regulatory risks)

The proponent is seeking an opportunity to undertake works for Council and lead the project management for the upgrade of Richardson Reserve as per the Master Plan thereby deviating from standard procurement practices that require the option to obtain multiple proposals from the market

Fairly and sustainably priced

The proposed project management fee is considered high at 5.5% however FFSA advised through their industry/project experience that this is a fair fee. FFSA has confirmed the project is a full Design and Construct project with no builders margin required and includes the below:

1. Site Survey 2. Geotechnical 3. Engineering

a. Pitch Design b. Stormwater Design c. Sub Base Design

4. Procurement 5. Pitch Construction 6. Design Tender 7. Building Design 8. Development Approvals 9. Consultation with Modbury Vista Soccer Club 10. Selection of Materials 11. Construction 12. Site Handover

FFSA has confirmed that a project contingency of approximately 7% will be budgeted for and if that amount is unexpended that amount will be returned to the City of Tea Tree Gully. Independent advice sought from a Certified QS reflects a percentage range of between 2 to 3.5% for a competitively bid project. Project budget allows 10% for Professional Fees in total and can therefore only support a Project Management fee closer to 2%. However the


FFSA’s proposal does not include any markup on subcontractor costs (builders’ margins) which are often typical for such projects above and beyond the project management fee. Councils Buildings Assets and Environment Team base project management on a 4% fee if they were to manage the project. Indirectly there would be savings to Council associated through passing the procurement process and other ongoing staffing expenses for project managing over a number of years onto FFSA which would partially offset the additional fee.

Involves an acceptable and optimal sharing of risks

Risk to Council of achieving value for money for the works. Council risks reputational damage as other suppliers do not have an opportunity to propose alternative offers. The risk to the proponent is removed as the competitive element has been removed from the procurement process.

Meets acceptable commercial and industry standards

FFSA is a state peak sporting body and would be able to meet commercial and industry standards.

Capacity and Capability of proponent

Relevant commercial and trading history

FFSA is a state body with a good reputation and have managed projects within CTTG (Modbury Jets Soccer Club, Ridgehaven) and recently commissioned by State Government to undertake a $20miilion building venture.

Financial capacity and technical competencies to deliver the project

Financial capacity not sighted however they have the technical competencies to deliver this type of project based on their previous projects

Prior dealings with government

Previous work undertaken with CTTG and the current $20million agreement with State Government to undertake a development of a club infrastructure including synthetic pitches, refer to projects below

Experience in delivering similar projects

Similar projects have been delivered by FFSA:

2016/2017 for CTTG-Modbury Soccer Club synthetic pitch

Completed the Adelaide Shores (1 pitch and building)

Parks Football (2 pitches and Building) Centre,

Adelaide City (Oakden),

Northern Demons (Pt Pirie),

Seaford and

FFSA are about to complete Birkalla and South Adelaide projects in the coming weeks 4 weeks


Reliance on third parties FFSA would manage the project through the controlled group to ensure regulatory controls are in place. Sub-Contractors would be used by FSSA in this project.

Council’s Land and Assets Policy Council’s Procurement Policy

Consideration needs to be given to the Wynn Vale, Richardson Oval Community Land Management Plan A key principle of the Procurement Policy is to provide open and fair competition by providing suppliers appropriate access to procurement opportunities, which would not be achieved by entering into exclusive negotiations with a sole supplier.

Uniqueness of Proposal This is a unique proposal given there is limited specialty in the market place that could deliver both synthetic pitches and building works for community clubs as part of the one project. FFSA has historically undertaken this through project managing other sites for this type of work. FFSA has contacts in the industry and economies of scale with their project management approach. Given Council’s current procurement policy, should Council procure and project manage this work, works would not likely commence until Dec 18/Jan 19 resulting in any pitch installation not being completed until later in the soccer season (soccer season commences March) however awarding FFSA the works now could see the project commence in Sept/Oct 2018 resulting in likely completion of the works prior to the soccer season commencing and therefore avoiding Club relocation issues. In the event construction work may require Council to relocate Modbury Vista Soccer Club for a short term period, FFSA (as sports peak body) would need to be engaged to assist facilitating this process with Council, therefore by project managing the whole project this can also be included in the scope, whereas a standard builder would not have the capability to have access to other soccer facilities the same way FFSA would. If the proposal is accepted by Council, a funding/ works agreement will be put in place with FFSA. The same terms and conditions would apply as per the previous funding agreement with FFSA for the Modbury Soccer Club.


The offer to project manage the whole (Stage 1 & 2) of the works has been incorporated into FFSA’s proposal. Council may enter into an agreement to complete just stage 1 or both stage 1 & 2. Under the circumstances that both stage 1 & 2 are included, a termination at convenience clause will be included in the funding agreement to allow for Council to terminate in the event that the project scope is reduced due to other constraints.

3. STRATEGIC OBJECTIVES

Strategic Plan The following strategic objectives in Council’s Strategic Plan 2020 are the most relevant to this report: Council’s Strategic Plan 2020 details the following Key Strategic Objectives which support the recommendations of this report.

Healthy and Safe

1. A community where people have easy access to places, spaces and services that

support good health. Prosperous and connected

2. A community that participates in meaningful community and economic activities. Vibrant and liveable

1. A city that is made up of places and spaces that are appealing and easy to

access. 3 A place that expresses a unique character and identity, an area that inspires pride

in its residents and one that people enjoy visiting.

Organisation Plan

Policies / Strategies Council’s Guidelines for Evaluating Unsolicited Proposals outline the steps for the evaluation of unsolicited proposals submitted to Council. Evaluation criteria has been established specifically for Unsolicited Proposals that are aligned with Council’s Procurement Policy and Delegations.

4. LEGAL Project Management and Procurement Should the project proceed, Council staff will seek a formal agreement between the FFSA and Council to define responsibilities and expectations in relation to project management and application of the budget, including any cost overrun or underspend.


Lease Agreement Modbury Vista Soccer Club Inc. has a ten year lease over the site which commenced on the 1 April 2016 and concludes on the 31 March 2026. In accordance with Council’s “Leases and Licences to Sporting and Community Organisations Policy”, maintenance of a turf sport ground is a responsibility of Council.

5. RISK – IDENTIFICATION AND MITIGATION FFSA will be required to comply with all tendering policies of Council and WHS practices.

6. PEOPLE AND WORK PLANS Council staff have been working with the MVSC to finalise the scope of works. However the detail project management has not been included in any staff plans for FYE 2019 at this stage. The use of FFSA will reduce the risk of these works not being able to be completed in a timely fashion as FFSA have the proven experience in completing these works. The offer from FFSA represents the timeliest process to complete these works, possibility during the early half of next season, given the restrictions that Council has in entering into contracts greater than 1% of rate revenue during the caretaker period.

7. FINANCIAL Council resolved to complete for stages 1 & 2 for an estimated $6.513m. An amount of $2.994m is allocated in 2018/2019 and a further $3.519 over 2019/2020. If accepted the fee for FFSA would be accommodated within the overall project budget.

8. ASSETS N/A

9. ENVIRONMENTAL N/A

10. COMMUNITY AND STAKEHOLDER IMPACT The completion of the works in a timely fashion will minimise disruption to users of the site and impact on local residents during construction.


11. COMMUNITY AND STAKEHOLDER ENGAGEMENT The MVSC has been advised of the FFSA proposal and support the approach. At this stage, due to the nature of the works no change is required to the community land management plan and consultation is not required. There will be a development application lodged. This may, or may not, include some public notification.

12. PROMOTION AND COMMUNICATIONS OF COUNCIL DECISION AND OPERATIONAL IMPACTS Once a construction timeline is known a full communications plan will be developed.

13. INTERNAL REPORT CONSULTATION The tight time frames to get this item on this agenda has meant only the report authorises have been consulted in preparing this report.

Attachments 1. Letter from FFSA outlining proposal

Report Authorisers

Nigel Dennis

Manager Recreation and Leisure Services 8397 7440

Chloe Oborn

Recreation Planning & Facility Coordinator 8397 7435

Sharon Hollamby

Manager Procurement & Contract Management 8397 7314

Carol Neil

Director Community & Cultural Development 8397 7341

Ryan McMahon

Director Organisational Services & Excellence 8397 7297

Letter from FFSA outlining proposal Attachment 1


report for confidential meeting of council...confidential meeting of council – 11 september 2018...

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