Tokoroa CBD Development resolved to continue

​Council resolved to continue to progress the Tokoroa CBD Development project, following robust debate in Council's public meeting on Thursday last week. This decision comes after tender quotes were $850,000 above budget.

"Due to significant and rapid increases in construction market costs, the funding allocated to the Tokoroa CBD development project has a shortfall of $850,000," said Acting Chief Executive Ben Smit. "We are disappointed by this, however we want to assure our community that this project has been well investigated and costed; and the shortfall is simply due to market increases."

Three rounds of quantity surveyor assessments over the past year, the latest being in August this year, indicated that our budget of $3.9million was appropriate for the project. The Project Control Group worked extensively with the preferred tenderers for both the building construction and civil works, however adequate savings without significant design changes are not possible in today's construction market.

"While Elected Members resolved during the Council meeting last Thursday to continue with the project as tendered, there is potential for this to change as the $852,000 additional funding may be reconsidered," continued Mr Smit. "While considering Annual Plan costs for 2019-20 year on the Thursday afternoon, the possibility of revisiting this decision was raised. Council is mindful of not losing sight of other significant costs heading our way with wastewater and solid waste especially that are going to impact rates."

It is possible that a Notice of Motion will be forthcoming.

During the morning meeting, four options were tabled and discussed.

  • Option 1 - Continue with project as tendered funded through additional loans of $852,000.
  • Option 2 - Continue with project as tendered funded through additional loans of $852,000. Rent out building space to fund some of the additional project costs.
  • Option 3 - Continue with civil work (roading, footpath etc), remove building glazing so no office / i-SITE space. Additional funding of $450,000 through loans.
  • Option 4 - Undertake cut-down version of the civils, create a green space where the building and other landscape development was planned, but don't construct the building in the short term. Start planning immediately on how the green space would be developed.

All Elected Members spoke during the meeting expressing their views and asking questions. A motion to continue with option 4 (adding the inclusion of building new toilets) was tabled but the motion was lost on voting. A second motion - to proceed with the project (option 1) - was tabled next, and a split decision six votes for and five against signified the motion was upheld.

If this resolution holds and the project continues as tendered, the additional funding will come from loans, to minimise the rate impact as much as possible.

Ends: words: 412

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Page reviewed: 19 Nov 2018 3:27pm