Hobsons Bay City Council 14 February 2017

Ordinary Council Meeting Agenda

Appendix 4

Laverton Swim and Fitness Centre Update

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Laverton Swim and Fitness Centre Update

February 2017

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This discussion paper was compiled by the Hobsons Bay Assets, Sport and Recreation Department. For further information contact the Hobsons Bay City Council on 9932 1000 www.hobsonsbay.vic.gov.au

Council acknowledges the Kulin Nation as the traditional owners of this land. We recognise the first people’s relationship to this land and offer our respect to their elders past and present.

The Council acknowledges the legal responsibility to comply with the Charter of Human Rights and Responsibilities Act 2006 and the Equal Opportunity Act 2010. The Charter of Human Rights and Responsibilities is designed to protect the fundamental rights and freedoms of citizens. The Charter gives legal protection to 20 fundamental human rights under four key values that include freedom, respect, equality and dignity.

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1. Introduction

The purpose of this report is to:

1. Present current status of issues relating to commercial viability, value of the asset, building condition, proposed minimum works to be undertaken by Council;

2. Propose a minimum scope of works and indicative costing. 3. Proposedthat a municipal wide review of the aquatic services be completed.

2. September 2015 Laverton Swim and Fitness Centre (LSFC) Discussion Paper Summary

In September 2015, a discussion paper was presented to a confidential Council Briefing. The purpose of the paper was to provide an overview of the LSFC’s performance, building condition and its ongoing role within Hobsons Bay. In summary the paper noted:

The LSFC is a 40 year old facility located on Council owned land within McCormack Park, Jennings St Laverton;

The current lease for the LSFC commenced in 1999 for a period of 21 years and is due to expire in May 2020;

Current rental income is $57,000 per annum;

The pool and gym were running at a profit. This was largely achieved by the operator minimizing staff numbers;

Pool attendance accounted for approximately 60% attendance and revenue with 30% is attributable to the gym;

Pool attendance is predominately swim classes and their popularity is attributed to the fact they are cheaper than neighboring centers;

The center is well run and within acceptable safety standards; Essential building works and filtration works were recommended to be completed

and budget of $750k; and An extension of the current lease be explored to 2025.

Following presentation of this discussion paper, the following works were carried out:

The filtration and all pool equipment upgrade works identified were completed. It is not anticipated that further major works will be required on this aspect of the facility. The cost of these works in 2015/16 was $ 330,000;

Further investigation works were undertaken to ascertain the scope and cost to refurbish the facility. The indicative estimate for the building works was $3.8M and the extent of the works were not apparent at the initial investigation carried out prior to the September 2015 report; and

These works require the facility be closed for a period of time whilst they were being carried out.

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3. Membership Profile

An assessment on December 2016 membership figures at the LSFC and Bayfit as at the end of January 2017 has been completed. A detailed breakdown is included in Appendix 1.

In summary, in total, there are currently 526 members and 1552 swim school members at the LSFC. A summary of the key membership figures is provided below:

63% of members and 49% of swim school participants live within Hobsons Bay and within the 5km primary catchment of the LSFC.

The remaining 6% of members and 12% of swim school participants that live within Hobsons Bay, fall within the 5km primary catchment of Bayfit.

31% of members don’t live within Hobsons Bay and 39% of swim school members don’t live within Hobsons Bay.

21% of members and 35% of swim school participants living outside of Hobsons Bay reside in post codes 3029 (Hoppers Crossing, Tarneit and Truganina) and 3030 (Point Cook, Sanctuary Lakes and Werribee).

Hoppers Crossing and Werribee both fall within the 5km primary catchment zone of Aqua Pulse (Wyndham City Council’s regional aquatic centre) while Point Cook and Sanctuary Lakes are located within 6kms of this facility.

In total, there are 331 members and 764 swim school participants that live within a 5km catchment of the LSFC. Over 300 participants with Autism participate in a specialist swimming program and a program supported by Mercy Health provides program support for 20 participants on a daily basis. The Centre also hosts three nudist groups that hold regular meetings within the facility.

A further assessment of the Centre membership, participation and cost trends is required to determine the long term viability of the facility’s primary catchment area. An assessment of the BayFit Leisure Centre membership figures undertaken in January 2017 indicates the following:

The centre membership is 2554 and there 2280 registered participants in the learn to swim program.

82.15% of Bayfit members live in Hobsons Bay The remaining 17.85% reside outside of Hobsons Bay.

Bayfit comprises an Indoor 25m pool, learn to swim pool and play area, hydrotherapy pool, spa, sauna, crèche, gym and group exercise room. The swimming program operated through Carlile Swimming caters for the Western Alligators Adult Swim Squad and Altona Swim Club. The Centre conducts a Living Longer Living Stronger Program designed for older adults with over 650 members, a water familiarisation program for cultural groups in conjunction with Life Saving Victoria and Carlile Swimming. The David House Program provides a weekly structured exercise classes for people with a disability. On a weekly basis the Florence Nursing Home accesses the hydrotherapy pool for the purposes of rehabilitation exercise.

 

4. Commercial viability and Strategic Assessment

There is evidence to conclude there are valid concerns regarding the ongoing commercial viability of the LSFC. Factors contributing to these concerns include:

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The Centre’s location is 8.6km’s east of Wyndham City Council’s AquaPulse, a $42m facility that opened in 2015 and is 7.3km’s west of Bayfit. Both facilities are of a higher standard and offer significantly more program opportunities. The interest of commercial operators to manage the LSFC following the expiration of the existing lease may be low given the proximity of these nearby Centres;

The profitability of the LSFC is primarily based on the family operator reduced staffing numbers and costs in comparison with any other commercial business operating in an aquatic facility. A new commercial operator is likely to incur additional costs to operate the business. These additional costs could be passed on to visitors of the Centre (through increase membership fees or entrance costs) likely to make the business too expensive to be viable given nearby competitors;

A family operator is unique in the pool management market place; There is a significant risk the current facility may be deemed not commercially viable and a lease beyond the existing term is not taken up by the market.

The maintenance and capital expenditure on LSFC and Bayfit for the period July 2005- January 2017 is outlined in Appendix 2 to this report. During the period 2006-2008 Council undertook the redevelopment of Bayfit including the closure of the outdoor pool, development of the new indoor aquatic components and dry program and gymnasium rooms. The total expenditure was $11.6M comprising $2.5M contributed by the lessee and $2.175M from Sport and Recreation Victoria, resulting in the net cost to Council being $6.8M.

Council currently does not have an endorsed strategic position on the future provision of aquatic or community facilities within Hobsons Bay. Population projections indicate a 19.9% growth across Hobsons Bay and specifically 18.9% growth within Laverton by 2035.

Officers continue discussions with Wyndham City Council (WCC) in relation to the development of community, aquatic and sport facilities as well as the strategic planning for proposed growth areas particularly north/west of Hobsons Bay.

The proposal to undertake a review of aquatic services within Hobsons Bay as referenced in this report is yet to be scoped however it is intended that the following would be considered and assessed:

Current regional facility provisions and future proposals

Feasibility and viability investigations

Partnership options and funding models including commercial ventures

Industry trends and innovations in the development of community facilities including aquatic facilities

The Sports Facility Needs Analysis (currently under development) would also inform these further investigations. Following endorsement of this report the strategic investigations project scope would be developed for further consideration by Council.

5. Physical Condition of the Facility

A summary of the building condition is provided below:

Previous Investigations

Various report and investigations have been carried out on the building condition. These have been carried out:

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With a view to refurbishing the current layout and amenities that is assuming the facility will function, operate and provide ostensibly the same amenity that it current does. These reports were not carried out with a view to improving the amenity of the building, its customer appeal or Council rental return;

Scoped under the premise that the facility is to be retained for the long term (i.e. 20 years plus). Short term options were not explored;

Works were scoped independently of an understanding of the tenant’s obligations under the lease;

No budget was allocated for the works, only to minimize costs where achievable and;

Full refurbishment of the building was indicatively estimated to be in the order of $3.8M.

Immediate issues

The following is a list of items that are affecting the buildings occupancy and are the landlord’s responsibility to provide under the lease currently in place. These issues include:

Roof leaking in the gym and program rooms affecting business continuity of the tenant;

Pool hall concourse drainage has collapsed filling the supply air plenum with water. The stagnant water can breed bacteria that can be distributed into the pool hall. This is a safety risk to the occupants.

The pool hall air-conditioning is at the end of its serviceable life. If it fails, it may not be able to be repaired. If the air-conditioning is not provided for a period of time awaiting for the manufacture of a new unit, the pool will have to close, therefore affecting business continuity. (It should also be noted the current air-conditioning layout is not assisting in reducing the effect of condensation deteriorating the pool hall steelwork, and should be redesigned. This would further delay the down time if done after the current system ceases to operate and needs to be replaced.)

Pool hall roof purlins have corroded to the extent they will need to be repaired within the next 3 years to maintain the safety of the structure. Full replacement will shut the pool hall down for a considerable period of time but minor repairs could be carried out minimizing this disruption.

Miscellaneous maintenance issues need to be addressed. These include disintegrating mortar on the eastern walls, tree removal on the northern pool hall wall that are affecting foundations and gutters.

Building fabric

Overall, all aspects of the building fabric is tired and needs refurbishment. Specific items identified that have either reached the end or past the end of their life are:

Roof sheeting in need of repair/replacement. Deteriorated areas causing water ingress into the building and potentially affecting the electrical items in these areas affecting tenants operations;

Various gutters and flashing need replacement; Various gutters undersized, downpipe and overflow configuration causing flooding

into the building, affecting tenants operations; Pool Hall roof steelwork rusting and needing addressing; Pool Hall concourse drainage failed causing:

o pool shell deterioration o stagnant water on the supply air plenum that can pose a health risk to

patrons

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Pool tiles delaminating – safety risk; Pool shell concrete deterioration; Western exterior wall brickwork mortar disintegration/loss; and Northern palm trees affecting the building structure and causing gutter blockage.

Pool Equipment/operations The pool plant and filtration system upgrade was completed in January 2016. As

such, it is not anticipated that further major works will be required on this aspect of the facility; and

The main pool water feed line has cracked and is leaking exacerbating the water collection into the pool hall supply air plenum. This was repaired in January 2017 and all pool inlet and backwash connections were checked.

Air-conditioning The pool hall air-conditioning is at the end of its serviceable and functional life and

needs replacing. The evaporative coolers in the gym and program areas are inappropriate and not

optimal to provide air-conditioning for these spaces. Appendix 3 to this report provides a series of recent photographs that depict the status of the gym and program roof leaks, pool concourse drainage system.

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6. Proposed scope of works for 2016/17 Financial Year

As a result of the building investigations, it has been confirmed that Council has immediate maintenance obligations as the landlord of this facility which are currently not being met. As such, these form part of the immediate works proposed for 2016/17 financial year at this facility. It is proposed that the minimum works are carried out to fulfill the obligations Council has as a landlord.

Costs estimates to carry out the proposed scope of works are:

Item

$’000

Roof works:

Lower roof decking, flashing, downpipe and gutter alterations and repairs

Pool Hall roof and purlin repairs Miscellaneous roof repairs Structural steelwork repairs/investigation Provision for safe roof access 

 

$350

Mechanical and Electrical works 

Pool Hall air-conditioning Electrical repairs 

 

$300

 Drainage and Other works:

Pool Hall concourse drainage repairs Palm tree removal in front/northern wall of the pool hall Brickwork repointing on the exterior western walls 

 

$100

Total

$750

7. Options for consideration

Two options have been developed for consideration on the future direction of the LSFC:

Option 1- Short term works with the development of an Aquatic Strategic in 2017/18

This option supports the completion of significant immediate renewal obligations in 2016/17 (as outlined in section 6). The completion of these works will cause minimal interruption for users of the facility.

The parallel activity to occur with the above works will be the development of a Hobsons Bay Aquatic Strategy to assess the provision and investment in aquatic and fitness program facilities in Hobsons Bay. It is proposed this body of work would be completed by June 2018 and use the remaining two years (of the lease) to plan for the recommended outcomes of the Aquatic Study.

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Option 2- Long term works completed in the short term

The condition and building investigation audit has highlighted a list of refurbishment works that are required at an approximate cost of $3,800,000. These works will extend the life of the LSFC by approximately 10 years.

If the full scope of works required was completed as one package, it will take approximately two to four months to complete and the LSFC would be closed to the public during this time. There are options to package works into three stages over three financial years with varying degrees of interruptions to the services onsite.

A full closure or multiple closures of the facility prior to the end of the current lease will have a significant impact on the facility operator. Furthermore, a short term major investment into the LSFC is a risk without confirmation of the ongoing management.

8. Recommendation

Due to the inconvenience of major interruptions to the service in the short term and the risks associated with the occupancy of the building following the current agreement, the preferred approach is to proceed with Option 1. This option ensures that the building is safe and structurally sound for the remainder of the existing lease and provides Council with adequate time to undertake a strategic assessment of aquatic provision in the municipality before investing significant capital in any facility upgrades.

 

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Appendix 1- LSFC and Bayfit Membership Overview (December 2016)

LSFC Members- Living in Hobsons Bay

Postcode Suburb Count Percentage 3015 Newport 3 0.57% 3016 Williamstown 3 0.57% 3018 Altona/ Seaholme 25 4.75% 3025 Altona North 3 0.57% 3028 Altona Meadows/ Laverton 331 62.93%

TOTAL 365 69.39%

LSFC Members- Living outside of Hobsons Bay

3020 Sunshine 3 0.57% 3023 Caroline Springs 4 0.76% 3024 Wyndham vale 3 0.57% 3027 Williams Landing 7 1.33% 3029 Hoppers Crossing/ Tarneit/ Truganina 56 10.65% 3030 Point Cook/ Sanctuary Lakes/ Werribee 55 10.46% 3340 Bacchus Marsh 3 0.57%

Unknown 30 5.70% TOTAL 161 30.61%

LSFC Swim School Members- Living in Hobsons Bay

Postcode Suburb Count Percentage 3015 Newport 17 1.09% 3016 Williamstown 51 3.29% 3018 Altona/ Seaholme 96 6.19% 3025 Altona North 24 1.55% 3028 Altona Meadows/ Laverton 764 49.22%

TOTAL 952 61.34%

LSFC Swim School Members- Living outside of Hobsons Bay

Postcode Suburb Count Percentage 3020 Sunshine 7 0.45% 3024 Wyndham vale 11 0.71% 3027 Williams Landing 19 1.22% 3029 Hoppers Crossing/ Tarneit/ Truganina 252 16.24% 3030 Point Cook/ Sanctuary Lakes/ Werribee 298 19.20% 3205 South Melbourne 13 0.84%

TOTAL 600 38.66%

Bayfit Members- Living in Hobsons Bay

Postcode Suburb Count Percentage3012 Brooklyn 50 1.96%3015 Newport/Spotswood/South Kingsville 666 26.08%3016 Williamstown 309 12.10%

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3018 Altona/Seaholme 343 13.43%3025 Altona North 537 21.03%3028 Altona Meadows/Laverton 193 7.56%

TOTAL 2048 82.15%

Bayfit Members- Living outside of Hobsons Bay

Postcode Suburb Count Percentage3020 Sunshine 50 1.96%3021 St. Albans 666 26.08%3023 Caroline Springs/Deer Park 309 12.10%3024 Wyndham Vale 343 13.43%3027 Williams Landing 537 21.03%3029 Hooper Crossing/ Tarneit/Truganina 193 7.56%3030 Point Cook/Sanctuary Lakes/Werribee 40 1.57%

Other participants further than 10km 37 1.45% No postcode data 304 11.90% TOTAL 456 17.85%

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Appendix 2- LSFC and Bayfit HBCC Expenditure for the period July 2005- January 2017

Laverton Swim and Fitness Centre

Reactive Maintenance $171,624Capital Works $698,400TOTAL $870,024

Bayfit Leisure Centre

Reactive Maintenance $306,400Capital Works $6,550,000*TOTAL $6,856,400

*Includes the capital redevelopment of Bayfit in 2006 which was achieved through a funding partnership including:

HBCC $6.8M State Government $2.1M Lessee $2.5M

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Appendix 3- Onsite photos showing examples of current issues

Photo 1- Program room roof leak

Note: It is acknowledged that this photo is poor quality however it is the only photo on file of this issue.

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Photo 2- Gymnasium roof leak

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Photos 3 to 8- Concourse drainage system

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