Public Excluded Council Meeting Agenda 24 March 2020 12.1 ...

Public Excluded Council Meeting Agenda 24 March 2020

Item 12.1

12.1 Council Accommodation Strategy

File Number: A11301540

Author: Brigid McDonald, Manager: Strategic Investment & Commercial Facilitation

Authoriser: Marty Grenfell, Chief Executive

Section under the Act

The grounds on which part of the Council or Committee may be closed to the public are listed in s48(1)(a) of the Local Government Official Information and Meetings Act 1987.

Sub-clause and Reason:

s7(2)(g) and s7(2)(i) - the withholding of the information is necessary to maintain legal professional privilege and the withholding of the information is necessary to enable Council to carry on, without prejudice or disadvantage, negotiations (including commercial and industrial negotiations).

PURPOSE OF THE REPORT

1. To brief the Council on current issues with civic accommodation and the work to date regarding future civic accommodation development; and seek approval to progress work to meet current and future civic accommodation needs.

RECOMMENDATIONS

That the Council:

(a) Approve in principle the reconsolidation of Council’s office-based services to a single location as soon as possible;

(b) Further assess and refine the costs involved with the remedial work required at the Council's Willow Street offices to enable safe continued occupancy for up to five years;

(c) Proceed to implement its resolution of 28 June 2018 (M18/56.14) to revise the master plan for the Willow Street Precinct, commencing with a Council workshop assisted by an independent facilitator to gain clarity about the Council's aspirations for the site and to agree expected timeframes and the governance structure for the review;

(d) Request a report to Council on the background and broad options associated with the historic issues that impact on the development of the Willow Street Precinct, which will include further engagement with hapu;

(e) Approve in principle the intention to secure leased interim office accommodation for the purpose of consolidating Council’s administration staff in a single location;

(f) Enter into good faith, non-binding discussions with Willis Bond to explore the lease of office accommodation at 90 Devonport Road;

(g) Explore and assess any other proposals to Council for interim accommodation options before a decision is made to proceed to a final detailed lease negotiation phase;

(h)

EXECUTIVE SUMMARY

2. Council’s Chief Executive commissioned Max Pedersen to review the progress made to date regarding the re-consolidation of Council's administrative services within a single location, and to recommend any actions that need to be taken to achieve that outcome.


Item 12.1

3. Mr Pedersen has reviewed a considerable volume of information and has prepared the report at Attachment 1, dated 18 March 2020 (“Pedersen Report”).

4. The Pedersen Report recommends actions to address interim and long-term civic accommodation needs, which require decisions by this Council to implement. Except for the maintenance and remedial works proposed for Council’s existing civic buildings at Willow Street, further formal approvals will be sought from Council ahead of entering into any formal negotiations and contractual commitments.

BACKGROUND

5. Prior to November 2014, Council administrative staff were consolidated in four buildings on the Willow Street site. However, the discovery of toxic mould in the buildings at that time resulted in the evacuation of staff from the main administration building (since demolished) and parts of two of the buildings that remain. Council staff that vacated the buildings were located in temporary leased accommodation, and that continues to be the situation today.

6. As the Pedersen Report notes, the case for a new civic administration building (“CAB”) to be developed on the site bordered by Willow, Wharf, Durham and Hamilton Streets (“Willow Street site”) is founded on the City Centre Strategy 2012. The intention to develop a new CAB on the Willow Street site is continued in the Tauranga City Centre Spatial Framework 2017.

7. In line with this strategy the Council has previously undertaken a project to masterplan the Willow Street site as a new civic precinct on which new civic facilities, including a CAB and library, would be developed.

8. In July 2018, Council entered into the Partnering Agreement with Willis Bond, which would apply to the redevelopment of the Willow Street site and other city centre land owned by Council.

9. The Partnering Agreement was the outcome of a procurement process whereby Council released an invitation for expressions of interest to the market, a request for proposals, and the appointment of a preferred development partner, for delivering identified requirements, including a CAB, library, and hotel.

10. As the Pedersen Report notes, the Council considered a proposal to commission a feasibility report to develop a CAB (and bus facility) at 21-41 Durham Street (DC 281), at its 6 September 2019 meeting. (This report followed a period during which little progress was made with regards to city centre master-planning and commitment to development.) The proposal was discussed but left to lie on the table.

11. Also, at the 6 September 2019 meeting, the Council considered a third-party development consortium’s proposal to sell 21 Durham Street for the purpose of a hotel development (DC 276). This proposal was left to lie on the table, too.

ONE LOCATION – INTERIM ACCOMMODATION

12. For the reasons provided in the Pedersen Report and its reference sources, the re-consolidation of Council’s administrative staff in one location, as soon as possible, is recommended.

13. In the current circumstances, an interim solution of leased premises (tenure and other terms to be explored) appears to be the most realistic option. Staff will investigate further and revert to Council with more information and options to enable informed decision-making.

14. Some options have already been considered on a preliminary basis as tenancy opportunities have arisen (e.g. Regional Council’s temporary premises on First Avenue); however, the Willis Bond letter of 14 February 2020 (Appendix 4 to Pedersen Report) is a recent development which is worth exploring.


Item 12.1

HOTEL DEVELOPMENT

15. The Pedersen Report does not address the matter of a hotel development, as this was not within scope.

16. Within recent years, several parties have expressed interest, formally and informally, in the development of a hotel on the Durham Street site/s. Given this interest, the favourable development potential of the Durham Street sites relative to other potential development sites in the city centre, and the Partnering Agreement’s identification of a hotel development on this site, it is recommended that Council approve engagement with Willis Bond to explore the delivery of a hotel and associated facilities (such as conference facilities), pursuant to the Partnering Agreement.

17. Such approval would not commit Council to the development of this site; but to establish a process and requirements for scoping and assessing a proposed development. This could occur ahead of, or in parallel with, a revision of the master-planning work for the Willow Street site.

18. It is acknowledged that residential accommodation in the city centre is important to the revitalisation of this area and to help meet demand. Whether this site is preferred for such use is a matter for Council to decide; however, all recent approaches to Council about this site have focussed on hotel activity. The economic benefit of an internationally-branded hotel has been addressed in previous reports to Council from Priority One, Tourism Bay of Plenty, staff, and market representatives.

STRATEGIC / STATUTORY CONTEXT

19. The Pedersen Report provides a sound overview of the strategic context for the decisions sought from Council. There is extensive background to these matters and further information can be provided as needed.

FINANCIAL CONSIDERATIONS

20. Should Council support the above recommendations, the initial phases of work would be funded from existing operational budgets. Formal approvals would need to be obtained from Council regarding further work and budget to progress all other aspects.

21. It should be noted that Council has made significant investment to date in planning for the CAB and development of the Civic site. Where relevant, this previous work will be utilised and not duplicated.

22. Current budget for capital works has been established on the basis of a long-term build. Consideration of the implications of implementing the recommendations of the Pedersen Report could be undertaken through the work proposed below at paragraph 25.


Item 12.1

CONSULTATION / ENGAGEMENT

25. It is not appropriate to engage with the community at this stage due to the importance of not prejudicing the commercial position of the Willis Bond (as the conditional purchaser and intended developer of 82-98 Devonport Road); and to enable Council to carry on, without prejudice or disadvantage, negotiations (including commercial and industrial negotiations).

SIGNIFICANCE

26. The significance of the matters covered by this report range from low to high. Proposals for engagement appropriate to the particular future steps will be discussed with Council as matters progress.

NEXT STEPS

27. Should Council adopt the recommendations of this report, the following work would be undertaken:

(a) Test remedial works cost estimates relative to alternative accommodation options and report back to Council with options and recommendations;

(b) Arrange a workshop regarding Council's aspirations for the Willow Street site, and seek agreement to timeframes and governance structure for the master plan review work to follow;

(c) A report to Council on the background and broad options associated with the historic issues that impact on the development of the Willow Street site, and engage further with hapu;

(d) Engage with Willis Bond to explore the lease of office accommodation at 90 Devonport Road, and assess against other options;

(e) Dependent on other formal offers to Council for interim lease accommodation, develop a framework for assessing any other third-party proposals;

(f) Engage with Willis Bond regarding potential development of a hotel at 21 Durham Street.

ATTACHMENTS

1. Attachment 1 - Council Accommodation Strategy - Pedersen Report - A11337922 - Public Excluded

Marty Grenfell

Chief Executive

Tauranga City Council

Tauranga City Council Office Accommodation Strategy

Introduction

1. Prior to November 2014 Council administrative staff were consolidated in four buildings on the

Willow Street site. However, the discovery of toxic mould (stachybotrys) in the buildings at that

time resulted in the evacuation of staff from the main administration building (since

demolished) and parts of two of the buildings that remain. The Council staff that vacated the

buildings were located in temporary leased accommodation and that situation continues today

with staff located at Spring Street and Cameron Road as well as at Willow Street.

2. You have asked me to review the progress that has been made to date with regard to re-

consolidation of Council’s administrative services within a single location and to recommend any

actions that need to be taken to achieve that outcome.

Desirability of Council services being located at a single office location

3. Since the events of 2014, the Council has taken a number of actions with the goal of

reconsolidating Council services in a single location. Since that time the Council has:

• Undertaken a project to masterplan the Council owned Willow Street precinct;

• Entered into a development partnering agreement with Willis Bond in relation to the Willow

Street precinct; and

• Provided capital funding for a leasehold civic administration building (CAB) development

within the Council’s Long Term Plan (LTP).

However, progress with the implementation of the master plan has stalled and consequently

development of the site is unlikely to proceed within an early timeframe.

4. Working from three geographically separated locations has negative impacts on staff

productivity and organisational culture which is caused by reduced connectivity between

departments, physical dis-connection between the organisation and governance, and lost time

moving between Council offices.

5. The Property Group Ltd (TPG) was engaged to determine at a high level the impact of the

Council’s staff being located within multiple premises in the CBD compared to them being

located within a single premises. The impact was considered from both operational efficiency

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Attachment 1

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and organisational culture perspectives and the report concluded that the current multiple

premises arrangement was having significant negative effects on each of these elements.

6. The full report, which has previously been presented to Council, is attached as Appendix 1.

However, it is useful to highlight some of the key points here.

As part of their work, TPG undertook a survey to determine how often staff were directly

affected by the need to travel from their primary office location to one of the other two office

locations. Survey responses were received from 310 staff which is approximately 45% of staff

members. The following table sets out the results of the survey.

Q. How often do you interact face-to-face with TCC personnel at TCC premises other than your main

one?

I don’t 17.92%

No more than once a week 39.41%

Between two and five times a week 31.92%

More than five times a week 10.75%

Q. How often do you interact face-to-face with members of public at TCC premises other than your main place of work?

I don’t 51.48%

No more than once a week 34.75%

Between two and five times a week 10.49%

More than five times a week 3.61%

Q. How much time do you spend travelling between TCC premises for face-to-face interactions in a normal working week?

Less than 30 minutes 57.00%

Thirty minutes to two hours 35.18%

Two to three hours 6.51%

More than three hours 1.95%

Q. Please rank on a scale of 1-5 the impact that you consider having multiple premises has on your productivity, 1 being significant and 5 being little or none.

1 significant 6.86%

2 17.65%

3 27.78%

4 23.53%

5 little or none 24.18%

Q. Please rank on a scale of 1-5 the impact you consider having multiple premises has on your ability to work effectively with teams which are located in a different premises to you, 1 being significant and 5 being little or none.

1 significant 18.09%

2 27.30%

3 18.75%

4 22.70%


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7. TPG concluded in their findings that the staff time spent commuting between the different office

sites could be conservatively estimated at 22,000 hours annually at a salary cost of over $1M

annually based on average staff costs.

8. The survey responses have a relatively consistent pattern across the three office locations.

However, the survey does not provide information on the destination of individual journeys

between the different office locations. The TPG report is silent on this matter but in my opinion

it is likely that the most common journey numerically, is from Cameron Road to Willow Street

(return) due to firstly, the scale and nature of services provided from Cameron Road and,

secondly, the fact that the Chief Executive’s office and meetings of elected members are located

at Willow Street. It is also likely that staff from within tier 2 and 3 management positions feature

heavily in the statistics for this particular journey which would exacerbate the cost of the

productivity loss.

9. TPG concluded in its report that working from multiple office locations is having a significant

detrimental effect on organisational culture. The following is an extract from the report:

“The multiple office premises foster a siloed culture. This results in a disconnection between

staff, with some becoming isolated from Team members and colleagues and therefore the wider

organisation. Horizontal and vertical communication is at times constrained, with informal

discussions between staff located within different premises becoming less frequent and often

replaced with formal meetings, emails or simply not occurring. A workplace which facilitates and

encourages unconscious ‘bump’ conversations, the coming together of people within appropriate

informal and formal spaces in a timely manner is essential. The geographical separation inhibits

these staff connections and the associated sharing of knowledge.”

10. TPG included questions in the staff survey about the impact on organisational culture of working

from multiple premises. The following table sets out the results of the survey:

Q. Please rank on a scale of 1-5 the impact that you consider having multiple premises has on the culture of your team, 1 being significant and 5 being little or none.


2 20.98%

3 20.98%

4 23.28%


Q. Please rank on a scale of 1-5 the impact you consider having multiple premises has on the culture of TCC as a whole, 1 being significant and 5 being little or none.


2 30.16%

3 19.02%

4 13.77%


11. Loss of staff productivity is not the only negative impact on efficiency that is caused by the current fragmented work environment. Working from three geographically separated locations will be creating cost inefficiency through the inevitable duplication of some elements of cost

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that arise as a consequence of fragmentation and the inability to benefit from the economies of scale of a single premises. However, this has not been analysed or measured.

12. Community accessibility to services is also negatively impacted by staff working from three

separate locations. TPG noted in their report: “Council’s customers and suppliers experience confusion, delays and frustrations at times when wanting to meet with Council staff. Arriving at the wrong premises, unable to locate a proximate car park, being unclear on how to use the self-service log in systems (and therefore not using them) and at times having to wait 15 minutes for a staff member to commute from another premises to meet with them are all consequences of Council operating from multiple premises. This impacts on Council’s relationship with the public and is a health and safety risk during an event as it often unclear which visitors are located within the premises”.

13. Another matter that is adding urgency to the need to reconsolidate staff in a single premises is

the fact that the three existing locations are at capacity, at least in the Council’s current office space utilisation model where all staff are assigned a specific desk or workstation for their own use.

14. This capacity issue can be managed in the short term by a partial transition to a more agile

working environment whereby the traditional assigned desk or workstation model is replaced by a model where desks are not assigned to individuals but instead are used by multiple different staff members. This system of shared work spaces recognises the fact that a fixed workstation will frequently not be occupied by the person that it is assigned to due to things like annual leave, meetings, work undertaken away from the office etc. However, there is a cost to introducing the unassigned workstation model because of the need to reconfigure office layout and provide some different furniture and equipment . For example, the estimated cost to create capacity at the Cameron Road site for an additional 80 staff using this means, is approximately $3.5M.

15. An additional leased premises would obviously be another means of addressing capacity but this

would further fragment the organisation and exacerbate the productivity and other negative efficiency issues raised earlier in this report as well as adding significant cost.

Master planning and delivering the Willow Street Precinct

16. The case for a new CAB to be developed on the site bordered by Willow, Wharf, Durham and

Hamilton Streets (the site) is founded on the City Centre Strategy 2012. Within the strategy, this

site is identified as the civic precinct which is to be the cultural and community focus of the City

Centre.

Within the Strategy there is a section focused on the civic precinct which provides the following

guidance:

• In the long term the precinct is redeveloped to include new Council administration buildings,

a new library, flat floor space, an upgraded Baycourt and the Art Gallery.

• A new City Square is created.

• It is the cultural heart of the region.

The intention to develop a new CAB on the site is continued in the Tauranga City Centre Spatial

Framework 2017.

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17. In line with this strategy the Council has previously undertaken a project to masterplan the site

as a new civic precinct on which new civic facilities, including a CAB and library, would be

developed. The Council has also entered into a partnering agreement with Willis Bond which

would apply to the redevelopment of the site.

18. The partnering agreement grants Willis Bond priority negotiation rights in respect of a number of

specified developments within the city centre, including the CAB and a library in the civic

precinct. This means that Willis Bond holds the rights to engage with Council in priority to, and

to the exclusion of, any other third party for the purpose of negotiating and endeavouring to

reach an agreement about the construction of those specified developments. The priority

negotiation rights also include the development of a hotel on the Durham Street site.

19. The following table sets out the key decision points relating to the master planning project and

the potential development of the site:

Date Decision

June 2015 The Council resolved to commence a strategic assessment of the issues and opportunities associated with the future of the civic campus buildings.

April 2016 The Council agreed that staff should prepare a business case for civic space options based on the master plan (option 3) developed by architects Warren and Mahoney and landscape architects LandLab.

June 2016 The Council considered the business case that had been prepared and agreed to consult on a proposed change to the LTP based on the business case which included the development of a new CAB on the site.

Sept 2016 The Council adopted an amendment to the LTP (2015 – 2025) to include a number of projects including: “Work with the private sector to deliver a new Civic Administration Building for Council to lease on the 91 Willow St land. $22.3m in capital costs plus an ongoing lease cost ($2.5m/an)”

Sept 2016 The Council adopted the Warren and Mahoney / LandLab developed master plan as proposed as a reference design that subsequent phases and alternative proposals could be tested against on a merit basis to “meet or better”. The master plan is attached as Appendix 2.

Feb 2018 The Council accepted in principle the master plan developed by Willis Bond. This master plan is attached as Appendix 3.

June 2018 The Council approved the partnering agreement with Willis Bond and approved the master plan “for the purpose of the project, but on the basis that the master plan is ‘indicative’ and currently needs to be revised and in the future amended as necessary in response to requirements of the Project during the Term”.

Sept 2019 The Council considered a proposal to commission a feasibility report to develop a CAB (and bus facility) at 21 Durham Street. The proposal was left to lie on the table. The minutes do not explain why it was left to lie on the table but it is noted that the proposal was inconsistent with both the Warren and Mahoney / LandLab and “indicative” Willis Bond developed master plans. The Council also considered a third party development consortium proposal to sell 21 Durham Street for the purpose of a hotel development. This proposal was left to lie on the table.

No further progress has been made since.

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20. The Council has provided the following funding within the LTP (2018-2028) for the development

of facilities on the site:

Project Total cost 2022 2023 2024 2025

$ $ $ $ $

CAB Fit-out 19,672,004 3,603,500 7,390,781 8,667,723

New Central library 40,492,400 21,442,100 19,050,300

Civic Plaza 4,086,635 1,977,900 520,500 1,588235

21. Despite the fact that the Council has entered into a partnering agreement with Willis Bond and

has provided funding within its LTP, the reality is that the master planning of the Willow Street

precinct is little further ahead than it was in 2015/16.

22. Even if confirmed master planning was in place, there are other impediments to developing the

site at the present time. These are:

•

• Issues relating to the Reserves Act status and classification of a portion of the site that need

to be worked through to enable a new CAB to be located on the land, should any interests in

the land change (such as commercial lease arrangements). This matter cannot be readily

worked through until the Council agrees on the final plan of development of the site

(including any changes to interests in this land). To be clear, the Reserves Act classification

does not restrict the development of a new CAB on this site; it does, however, limit any

ground lease option and any third party tenants.

• The application of Public Works Act requirements to some portions of the site. This issue is

less significant than the preceding two issues.

23. The stalled master planning, together with the need to resolve the impediments to development

identified in preceding paragraphs, mean that the prospect of developing a CAB on the site

within the medium term is slim. Each of these items could be resolved if urgency and

commitment was given to them by the Council. However, the rate of progress to date does not

provide any confidence that a speedy resolution is likely to be achieved.

In view of this, Council now needs to find an alternative interim location for its CAB as the

current fragmented situation is not considered to be sustainable in the longer term.

24. The need to act now to establish a short to medium term solution to office accommodation

needs does not diminish the desirability of finalising master planning of the site. This is

necessary in order to fulfil the Council’s long term strategy for the area. The Council should

resume its master planning processes as soon as that is possible.

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An interim office accommodation solution

Development at 90 Devonport Road

25. An opportunity has arisen to lease part of the new office development planned for 90 Devonport

Road by Willis Bond. This potentially would enable the Council services (other than library

services) currently located at Willow Street, Spring Street and Cameron Road to be consolidated

in a single modern and fit for purpose office facility. It would potentially provide a good interim

office accommodation solution pending the eventual development of a permanent CAB on the

site at Willow Street. A letter from Willis Bond in this regard is attached as Appendix 4. An aerial

photo of the site to be developed is shown at Appendix 5.

26. The development site (except for 86-88 Devonport Road) is currently owned by the Council and

is subject to a sale and purchase agreement between the Council and Willis Bond. The

agreement is subject to a due diligence period that expires in mid-June this year. The purchaser

has previously advised that its development vision for the property was a 9000m2 office building

plus 600m2 of mixed retail on the site. The Council’s requirements for office space are in the

order of 8000m2 which would mean a significantly larger development would occur on the site if

the Council agreed to consolidate its operations in leased space there.

The sale and purchase agreement with Willis Bond is not contingent on the Council leasing back

part of the development. However, a decision to do so is likely to create benefits for the city.

27. The development and use of this property for mixed use commercial activities will bring more

people into the city centre and will be another step towards revitalising Devonport Road and the

surrounding CBD area, in conjunction with other changes such as the new Farmers building

development. If Council offices were located in this development, it would amplify these positive

influences through increasing the realisation of the maximum potential of the site for the benefit

of the city.

28. Based on usual timeframes for developments of this nature it is assumed that the building could

be ready for occupation by the end of 2023. That would fit in reasonably well with the expiry

dates of the current leases of office space at Spring Street and Cameron Road which are

February 2024 and February 2025 respectively.

29. This proposed development at 90 Devonport Road is potentially a good medium term office

accommodation option and it is recommended that the Council explore the option, noting the

likely importance for the developer in confirming such arrangement in line with their due

diligence timeframe (mid-June 2020). The following is a suitable process for doing so:

• The Chief Executive is authorised to scope accommodation requirements and undertake

preliminary non-binding negotiations about key lease terms and costs;

• A preliminary negotiations report is presented to Council for consideration for approval for

the Chief Executive to proceed to non-binding detailed negotiations;

• A detailed negotiations report is presented to Council for consideration for approval to enter

into a lease agreement.

30.

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Leasing space within the new development would certainly be

consistent with the spirit of the relationship between the Council and Willis Bond that is fostered

by the partnering agreement.

Other options

31. I understand that the Council has been made aware that another party(s) may be interested in

submitting an alternative proposal to construct office accommodation for lease to the Council

on an interim basis pending the development of the Council’s permanent CAB.

To be clear, the development of a permanent CAB is subject to the provisions of the partnering

agreement with Willis Bond.

32. If other temporary accommodation options are to be considered, the Council must remain

aware of the importance of developer attributes such as experience, reliability, quality and

design management experience and not just cost. Willis Bond was selected as Council’s

development partner, through a competitive process, because the company rated highly in

these attributes. This gave the Council confidence that the company could successfully deliver

high profile projects that would enhance the city centre. If considering other options, the Council

should consider whether they are likely to provide as good an outcome for the city as the Willis

Bond proposal.

33. The Council’s procurement policy specifically exempts the lease of land or buildings from

application of the policy which means that the Council is not obliged to follow a competitive

process in such transactions. I understand that this approach is consistent with generally

accepted practice within the government sector. However, if the Council wishes to provide the

opportunity for developers other than Willis Bond to present development proposals to provide

temporary office accommodation, it would be prudent for it to follow some form of competitive

process in doing so.

The following two stage process, run in parallel with non-binding negotiations with Willis Bond,

would be suitable:

• Firstly, a Request for Information (RFI) from potential developers. This stage would seek

general information about the proposed development and its location and also information

about the developer, including things such as track record, capacity to deliver, details of

similar scale developments carried out etc;

• Secondly, if necessary, a Request for Proposal (RFP) process whereby any RFI respondent

that scores sufficiently highly against the required attributes for the project is requested to

submit a specific proposal for consideration against the Willis Bond proposal.

The attributes to be weighed in any such process should include non financial matters such as:

experience; reliability; quality of past projects; financial capacity to deliver; the extent to which

the project enhances or activates the city centre.

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Funding

34. The Council has already made provision of $19,672,004 for fitout costs for a new CAB within its

LTP. The funding is provided in the years ending 2023-2025. This funding could be used for fitting

out the leased accommodation. The Council has also provided for lease rental of $3,077,010 per

year commencing in April 2025 as the proposed new CAB was to have been occupied on a

leasehold basis. The adequacy of the rental provision will not be known unless and until

negotiations are undertaken.

Short term accommodation

35. If the Council commits to securing medium term consolidated office accommodation within the

next five years, Council staff can remain in their present locations until that time. I have set out

below Information that is relevant to the existing office locations.

Cameron Road

36. The current lease on this property continues until February 2025 and there is then a three year

right of renewal. There are no known issues relating to this building that would prevent

continued occupancy during the lease period.

Spring Street

37. The current lease on this property continues until February 2024 and there is then a one year

right of renewal. There are no known issues relating to this building that would negatively

impact on continued occupancy during the lease period.

Willow Street

38. This property is owned by the Council and consists of three separate buildings connected to each

other by link bridges. The buildings are occupied as follows:

• Block A - Council Chambers and meeting rooms

• Block B - Library, Governance, Community Services, Communications, Strategic Maori

Engagement, Cater Plus

• Block C - Executive Team and Customer Service Centre (CSC).

39. There are numerous impediments to continued occupancy of this property. These impediments,

which relate to building integrity and building compliance need to be remedied by the Council to

ensure the health and safety of the staff and others that continue to occupy the building.

40. According to an assessment by Beca the seismic resilience of the buildings is likely to be below

34% of the New Building Standard due to the design of the level 2 concrete link bridges between

the buildings. To put this in context, the following table taken from the Engineering Assessment

Guidelines provides a basis for interpreting NBS ratings.

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Building Grade

%NBS Approximate risk relative to a new building Life-safety risk description

A+ >100 <1 Low risk

A 80 to 100 1 to 2 times Low risk

B 67 to 79 2 to 5 times Low or medium risk

C 34 to 66 5 to 10 times Medium risk

D 20 to 33 10 to 25 times High risk

E <20 More than 23 times Very high risk

If the link bridge deficiencies are remedied, the buildings are expected to have NBS ratings of at

least 67%.

41. The buildings are not weathertight and consequential water ingress led to Level 1 in Blocks A

and C being evacuated in 2014 due to the presence of mould. These areas, as well as a single

room on level 2 in Block C continue to be unoccupied. Because of the continuing problems with

water ingress there is a stringent air quality monitoring regime in place to protect the health and

safety of staff and other occupants.

42. There is a significant amount of deferred maintenance in relation to the Willow Street buildings.

Property consulting firm Prendos NZ Ltd was engaged by the Council earlier in 2018 to undertake

a building and services condition appraisal of the buildings. The Prendos report identified

numerous building defects, some of which require urgent attention. These defects primarily

related to weathertightness, fire and electrical compliance requirements, building integrity,

ventilation and health and safety issues. A copy of the Prendos NZ Ltd report is attached as

Appendix 6.

This deferral of maintenance work has occurred due to the uncertain future of the buildings.

43. Construction consultant Mark Ross was engaged to peer review the work undertaken by Prendos

NZ Ltd and to cost the remedial work necessary to enable continued occupancy of the buildings

for the next five years. The high level description of necessary remedial work and the costings

thereof are shown in the table below:

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OVERALL BUDGET (EXCL GST)

1,124,481.18

1,201,605.60

989,649.68

3,546,016.46

44. There is currently no funding provision made for these remedial works.

Conclusions

45. This report identifies the issues that need to be successfully dealt with to resolve the Council’s

office accommodation needs and aspirations in the short, medium and long term. It is important

that the Council’s office accommodation works well for the community, provides an efficient

work environment for staff and elected members, and helps stimulate and activate the city

centre. The following recommendations provide a roadmap to achieving these goals.

Recommendations:

One location

46. That the Council reconsolidate its office-based services to a single location as soon as possible;

Long term accommodation at the Willow Street Precinct

47. That the Council proceed to implement its resolution of 28 June 2018 to revise the master plan

for the Willow Street Precinct;

48. That the master planning process be commenced with a Council workshop assisted by an

independent facilitator to gain clarity about the Council’s aspirations for the site and to agree

expected timeframes and the governance structure for the review;

49. That, depending on the Council’s aspirations for the site, staff then develop a draft project plan

for the review of the Willow Street Precinct masterplan and present this to the Council for

approval;

50. That the Council give priority to engaging with hapu to resolve the historic issues that are an

impediment to developing the Willow Street Precinct;

Interim (Medium term) office accommodation

51. That the Council approve in principle the intention to secure leased medium term office

accommodation for the purpose of consolidating its administration staff in a single location;

52. That the Council approve engagement with Willis Bond to explore the lease of office

accommodation at 90 Devonport Road in general accordance with the process set out in this

report (subject to recommendation 53);

12

53. That if the Council decides to consider other third party leased interim accommodation options,

it proceeds in general accordance with the competitive process set out in this report and that

any proposal invited and received through the RFP process be evaluated against the Willis Bond

proposal before any decision is made to proceed to the final detailed lease negotiation phase;

Short term office accommodation

54. That the remedial work required at the Council’s Willow Street offices be undertaken with

urgency to enable safe continued occupancy until new medium term office accommodation is

secured.

Max Pedersen

18 March 2020

13

Appendices 1. “The Impact of Council Operating from Three Separate Office Premises Versus One (May 2019)”

– The Property Group

2. Civic space master plan – Warren and Mahoney / LandLab

3. Civic space master plan – Willis Bond

4. Letter from Willis Bond re Devonport Road development

5. Aerial photograph of Devonport Road site

6. Prendoz NZ Ltd report

Tauranga City CouncilThe Impact of Council Operating from Three Separate Office Premises Versus OneMay 2019

1. Executive Summary

2. What does ‘Fit-For-Purpose’ Office Accommodation mean for Council?

3. Council’s Current Three Premises Defined

4. The Staff Interviews and Staff Survey

5. Summary of the Impacts of Operating from Multiple Office Premises

Appendix A - Staff Survey

Appendix B - A comprehensive list of the key statements from the interviewees

3

6

8

16

20

26

27

Contents

Debby Sanders

Regional Business Manager,

Waikato/Bay of Plenty

1. Executive Summary

1.1 Background, Purpose, Scope and Methodology

Weathertight issues within Tauranga City Council’s (Council) Civic Centre building at 91 Willow Street (Willow St) have resulted in toxic mould developing. In 2014 parts of the Willow St building were demolished, other parts retained but decommissioned, with the balance continuing to be occupied and utilised by Council. Over the ensuing five years this has required the majority of Council staff and contractors to relocate to alternative multiple office premises, with some staff moving at least twice during this period.

The Property Group Limited (TPG) has been engaged by Council to determine at a high level the impact of being located within multiple premises compared to being located within a single premises. The impact is to be considered from both an operational efficiency and organisational culture perspective.

To complete this assessment TPG has engaged with Council staff through interviews and an organisation wide survey, and reviewed information held by Council on the three premises it currently occupies. This information includes the scope of facilities and operational costs, health, safety and wellbeing data, the public use of the premises and the underlying culture of Council.

1.2 Report Framework

Within this report we first consider what “fit-for-purpose” office accommodation means for Council.

We then investigate and capture the details of Council’s three current Tauranga premises and compare their main features. The premises are:

• 91 Willow Street

• 46 Spring St

• 306 Cameron Road.

Based on the results of our investigations, staff interviews and a staff survey, we then consider the effects of Council operating from these three geographically separated premises and determine the impacts on Council and its stakeholders.

1.3 Main findings and Conclusions

1. The geographical spread of the three premises requires staff to commute frequently between the three premises to attend meetings with colleagues, Team members, Councillors and the public. This appears to be unavoidable with multiple premises. Based on survey responses received from 50% of staff (310 staff), the staff time spent commuting between Council’s offices is conservatively estimated at 22,000 hours annually, at a salary cost of $1.01m.

2. It has recently been recognised by the Chief Executive (CE), and confirmed by Council’s independent advisors and staff, that the organisational culture of Council is suboptimal. The CE is proactively working to remedy this, shifting Council’s fundamental culture from being process driven to outcome focussed and therefore achieving the best outcomes for the community. He acknowledges that this change will take time as it involves people, processes, systems, structure and leadership. It is widely acknowledged that office accommodation has a direct influence on organisational culture. As outlined in more detail below, having Council staff spread amongst multiple geographically separated office premises is having a significant detrimental effect on Councils’ culture.

3. The multiple office premises foster a siloed culture. This results in a disconnection between staff, with some becoming isolated from Team members and colleagues and therefore the wider organisation. Horizontal and vertical communication is at times constrained, with informal discussions between staff located within different premises becoming less frequent and often replaced with formal meetings, emails or simply not occurring. A workplace which facilitates and encourages unconscious ‘bump’ conversations, the coming together of people within appropriate informal and formal spaces in a timely manner is essential. The geographical separation inhibits these staff connections and the associated sharing of knowledge.

EXECUTIVE SUMMARY / 3

1. Executive Summary cont’d


4. Council’s customers and suppliers experience confusion, delays and frustrations at times when wanting to meet with Council staff. Arriving at the wrong premises, unable to locate a proximate car park, being unclear on how to use the self-service log in systems (and therefore not using them) and at times having to wait 15 minutes for a staff member to commute from another premises to meet with them are all consequences of Council operating from multiple premises. This impacts on Council’s relationship with the public and is a health and safety risk during an event as it often unclear which visitors are located within the premises.

5. Decision making has become noticeably protracted and difficult at times due to the physical and geographical separation of staff. Staff consider it necessary to at times replace what should be face to face meetings with discussions via emails, to make decisions in isolation, and exclude those less available or physically able to attend meetings.

6. The differences in quality and amenities provided by the three physical premises and their different geographical locations has in some cases resulted in a ‘them and us’ culture, with the perception by some staff that they are less valued than their colleagues. This may in part be reflected within Council’s 25% higher than industry average sick and wellness and wellbeing leave.

7. Multiple premises require the duplication of some amenities, and/or the inability to enjoy the economies of scale of a single premises. Examples include workstations/flexi desks, bathrooms, security systems, staff cafes, utility areas and equipment e.g. photocopiers and workbenches, technology infrastructure and end of trip facilities. The geographical separation of the multiple premises has also necessitated increased resourcing e.g. the engagement of an FTE and vehicle to distribute printed material and mail between the multiple premises. The management of business continuity post a disaster event is a recognised benefit of operating from multiple premises, but equally can be managed within a single premises at no or limited additional cost.

8. Many staff consider that Council currently lacks a physical ‘heart’; one fit-for-purpose café where all staff can come together to meet with their colleagues,

recharge whilst enjoying good coffee and great food and within an inclusive environment. Those staff who were with Council when Willow St provided a single office premises recall the value that the staff café and Cater Plus provided. Staff no longer have this and Council is incurring increased costs to have Cater Plus service each premises daily. A single meeting place is recognised by many as an essential component to Council’s workplace and one which is now noticeably lacking, with negative consequences for Council’s organisational culture, staff relations and individual wellness and wellbeing.

9. Fresh air and exercise are recognised as benefits of commuting between offices, but viewed by staff as offset “up to 10 fold” by the negative impacts. The negative impacts include risk of harm from commuting traffic, weather, trip and slip hazards, verbal abuse from the homeless, loss of productivity, high levels of frustration, inability at times to attend meetings in a timely manner and to communicate in the most efficient and effective forms, and exclusion of those less physically able. Fit-for-purpose, single premises office accommodation would not only eliminate the majority of the negatives, but could also retain the benefits.

10. The ability to accommodate growth in staff numbers within the three premises is very limited. Spring and Willow St premises are at capacity. Based on a very recent fire report the building is fire compliant for an additional 120 people. However an occupancy ratio of 7.7m² per person would clearly be unworkable for a Council and the building is considered to be close to capacity. Some informal meeting spaces and flexi desks could be removed and replaced with workstations. As flexi desks and meeting spaces are already at a premium, this reconfiguration may be viewed as solving one problem but creating another.

1. Executive Summary cont’d


1.4 Recommendations and Next Steps

We recommend:

1. That Council considers the content of this report and, for the reasons outlined in the report, resolves that office accommodation for staff for the long term should be provided in single rather than multiple office premises.

2. That if Council wishes to progress this matter further, it considers undertaking the following next steps:

a. Developing a specific Workplace Strategy to determine the essential workplace elements that will provide Council with fit-for-purpose office premises that underpin an optimal organisational culture.

b. Undertaking a Registration for Expressions of Interest process to identify the development options available to Council to provide premises that will realise Council’s Workplace Strategy and therefore provide the optimal long term accommodation solution.

c. Aligning current premises leases to meet intermediary requirements to mitigate further interim relocation of staff to tenancies e.g. to ensure rights of renewal provide the necessary security of tenure until a long term accommodation solution is available for Council to occupy.

2. What does ‘Fit-for-Purpose Office Accommodation’ mean for Council?

FIT-FOR-PURPOSE OFFICE ACCOMODATION / 6

2.1 Overview of Best Practice Office Premises

Over at least the past decade, on an international scale, there has been a significant and accelerating transformation in the way work is undertaken and the associated form and function of office premises. This has been driven by a need to achieve:

• Increased staff productivity

• Greater functionality of space and a focus on an enabling workspace. Therefore a workplace which enables and supports staff to undertake tasks required to fulfil their respective roles

• Increased efficiencies of both the premises and staff through the premises and work environment being aligned with the requirements of the occupying organisation

• Reduced fixed and operating costs associated with both the premises and staff

• Increasingly energy efficient and sustainable premises

• Seamless and timely vertical and horizontal, formal and informal organisational communication

• A workplace which positively impacts the wellness and wellbeing of staff

• Premises that will attract and retain top staff

• Premises designed from a robust workplace strategy that has been developed within the organisation

• A workplace that provides the foundation for a single, positive culture within the organisation.

We now live in a world where workers no longer have to undertake all their work activities at a single dedicated workstation. It is recognised that different workspaces may be best for different work activities, with interior layouts providing a range of agile work settings. Increasing numbers of organisations in New Zealand are embracing this change and these organisations come from every spectrum of business. Technology has and continues to be the great enabler of this transformation.

When assessing a selection of fit-for-purpose premises for a range of organisations, a number of common components will be present but equally there will be fundamental differences required to meet each organisation’s specific needs. When it comes to office premises, one size does not fit all. It is the detail that must be understood and realised through a workplace strategy and design process developed collaboratively with the occupying organisation. This is critical to realise an organisation’s fit-for-purpose office accommodation.

‘Culture eats strategy for breakfast’ is a famous quote from legendary management consultant and writer Peter Drucker. This statement is not intended to diminish the importance of strategy but rather to emphasise how vital a powerful, empowering and unified culture is for the success of an organisation. Office premises which enable an organisation to be under the one roof will help facilitate a single organisational culture; a culture which is consciously developed and led from the top, and which is consciously and subconsciously engrained throughout. Single premises can be an actual enabler of culture just as culture can be an actual enabler of strategy.

2.2 Council Premises Requirements

When evaluating whether an organisation’s office premises are fit-for-purpose, workspace and design professionals focus on two critical elements. The first is the functionality of the office space which refers to the layout and how well the space enables its users to undertake their work tasks. The second element is the degree to which the office premises are aligned with the organisation’s aspirational requirements. This is alignment with the organisation’s desired culture, philosophy and purpose. Collectively the functional and aspirational requirements define the characteristics of the physical premises that are necessary to enable the organisation to deliver its business activities in an optimal manner.

A functional and aspirational premises brief is typically developed over a number of stages; initially being developed at a high level only. Once approval is granted for an accommodation project to proceed, the brief is then refined and developed in more detail.

FIT-FOR-PURPOSE OFFICE ACCOMODATION / 7

Council’s current premises have had to reactively evolve from the 2014 events followed by the need to vacate 2 Devonport Road in 2018. Notwithstanding this, there has been a conscious investment in the workplace to endeavour to provide a modern and enabling workplace within the constraints of the physical spaces available. One key constraint has been Council’s ability to choose premises based on location. With a strong focus on keeping all office premises within the wider Tauranga CBD, due to the limited supply of suitable premises this has necessitated TCC occupying multiple premises that are geographically separated from one another.

It could be argued that as an intermediary solution to Council’s office accommodation requirements, each of the physical premises are reasonably suitable under the circumstances, though not what would be considered fit-for-purpose and future proofed. Critical weaknesses include the geographical distance between the three premises and the lack of capacity for future growth. This results in inefficiencies and most importantly the inability for Council to develop a single organisational culture; a culture which is critical for the success of Council.

2. What does ‘Fit-for-Purpose Office Accommodation’ mean for Council? cont’d

3. Council’s Current Three Premises Defined

CURRENT THREE PREMISES DEFINED / 8

3.1 Key information on Council’s Three Office Premises

Council currently occupies three office premises in Tauranga; one owned and two leased. Details of the three premises are summarised in Table 1 below. From this information we can compare the floor area (m²), key amenities, attributes, tenure, lease and operating costs.

It should be noted that all figures have been provided by Council and whilst some may contain an element of estimation due to current changes within Council and/or the cost benefit of refining or verifying the numbers further, they are considered sufficiently accurate for the purpose of this high level analysis. All costs are exclusive of GST.

Table 1: Key information on Council’s Three Office Premises

Features 91 Willow Street 46 Spring Street 306 Cameron RoadOwned by Council or Leased by Council from a Third Party

Owned Leased Leased

Total Net Lettable Area of Premises

1,917m²This area is an estimate of the space occupied by ‘office’ staff only i.e. excluding the library and separate tenancies

1,091m² 4,255m²

Number of onsite car parking and types

8 for use by CE, Mayor and Councillors

2 covered• 1 accessible• 1 for generator

• 39 Basement• 38 fleet vehicles• 1 for PPE Cage

• 20 Ground Level• 12 fleet vehicles• 5 visitor • 3 for bicycle parking

cage

Annual Lease Rental Cost N/A Premises: Car Parks:

Premises: Car Parks:

Annual Operating Cost (OPEX) based on Actual for 17/18 Year

$278,000

Annual Maintenance Cost (CAPEX) for Owned Premises

$122,000 ($489,339 actual cost over last 4 years divided by 4 to provide annual year amount)

N/A N/A

One-off Interior Maintenance Required over next Two Years if Willow St Continues to be Occupied Including Level 1 being Reoccupied

$2,290,000 N/A N/A

3. Councils Current Three Premises Defined cont’d


Features 91 Willow Street 46 Spring Street 306 Cameron RoadLease Terms and Conditions

N/A • Current Lease Period Ends: 28 February 2020

• 1 x ROR for one year• Final Expiry Date 28

February 2021

• Current Lease Period Ends 12 February 2025

• 2 x ROR’s of three years each

• Break clauses in 2021, 2022 and 2023

• Final Expiry Date: 13 February 2031

No of Staff Domiciled at the Premises

63 123 434

Staff Density Ratio (m² per person)

30.42 people per m²(The ratio is higher due to Council Chambers, Councillor’s retiring room and large café being included)

8.86 people per m² 9.8 people per m²

Teams Domiciled at the Premises

•

Catered Café Yes No Yes

Cafe m² per person domiciled at the Premises

Café area: 333m²Café area pp: 5.29m²

Café area: 31m²Café area pp: 0.25m²

Café area: 250m² Kitchenettes (6): 78m²Café area pp: 0.76m²

Bicycle storage Yes No Yes

End of Trip Facilities which include Changing Facilities with Showers and Toilets

Yes Yes Yes

Capacity for Growth in Staff Nos.

Nil Nil 120 staff - refer below for details



Features 91 Willow Street 46 Spring Street 306 Cameron RoadAdditional Comments: • HVAC is old,

environmentally unfriendly and spare parts are scarce

• Light fittings require replacement

• Due to fire regulations the premises are at capacity. Therefore onsite meetings cannot be held with people who are not located within these premises.

• A very recent review of the fire compliance requirements in this building means means the building is fire compliant for an additional 120 people. However an occupancy ratio of 7.7m² per person would clearly be unworkable for a Council and the building is considered to be close to capacity

• Some flexi desks could be converted to allocated workstations but ability to accommodate visitors from other premises would be restricted

• Meeting space could be converted to accommodate flexi desks but with already too few meeting spaces this would replace one problem with another

Notes:

1. The net lettable floor area of 91 Willow Street covers the area currently occupied by Council, excluding the uninhabitable areas and the library

2. The information associated with the above figures for 46 Spring and 306 Cameron is as per the Deeds of Lease for the respective tenancies.

Having staff domiciled in different premises that have a disparity of quality or amenities frequently leads to a ‘them and us’ attitude, which then exacerbates siloed cultures. Table 2 in Section 3.3 details the variations between the three premises with the effects and impact of these variations discussed later in this report.



Map 1: The Geographical Spread of the Three Premises

Map 1 illustrates the relative location of the three premises and the TV3 car park, the distance between premises, typical distance and commute time for those walking via the depicted route, and key danger spots. These details are described in more detail below with the impacts discussed in the Sections and 4.0 and 5.0.

The travel distances, times and related metrics are:

• Distance between premises (one way, workstation to workstation or meeting):

• Willow St to Spring St: 150 metres

• Spring St to Cameron Rd: 850 metres

• Willow St to Cameron Rd: 1 kilometre



Notes:

a. The routes within the map are the most direct route via footpaths. They therefore do not include routes which require walking down alleyways between buildings or through buildings e.g. Elizabeth St car park building.

b. Alternative routes may provide increased veranda coverage and therefore increased protection from weather but a greater distance.

• Time to walk between premises (one way and off-peak traffic times):

• Willow St to Spring St: 2.5 minutes

• Spring St to Cameron Rd: 11 minutes

• Willow St to Cameron Rd: 13 minutes

Notes:

a. The walking times are based on a physically able (injury free) person walking at a moderate to brisk pace.

b. Some staff travel by scooter, bicycle and car, however according to the survey 90% of commuters walk. Hence walking times have been used.

• Number of required road crossings (one way):

• Willow St to Spring St:

• 2 road crossings in total. 2 pedestrian crossings available en-route

• Willow St to Cameron Rd:


• Spring St to Cameron Rd:


3.3 Variations between the three premises

When staff within a single organisation are provided with varying amenities there is a risk that some staff will feel more or less valued than their colleagues. Table 2 captures the variations between the key amenities within the three premises. How staff view each of the premises from their perspective is discussed within Section 5.3.1.



# Detail Comment

1 Meeting spaces ✓ ✓ ✓ • All three premises have meeting rooms that can accommodate 10+ people

• Smaller, 2 to 3 person, non-bookable, confidential meeting rooms have been requested at all premises

• The breakout pods or spaces are very well used. Having more of them, with less formal meeting rooms, is requested at all premises. However the demand on space for workstations to manage growth in staff number, or lack of space and fire compliance constrains this.

2 Bike storage ✓ X ✓ • Willow St staff use TV3 bike storage facility• Cameron Rd bike storage is on site within the ground level car

parking area• Spring St is not able to accommodate bike storage onsite;

instead it is provided at the TV3 site which is circa 250 metres from Spring St premises.

3 Showers and end of trip facilities, including lockers

✓/X* ✓/X* ✓/X* • Spring St does not have the space for lockers at the end of trip facilities

• Willow St has limited lockers available• Cameron Rd has limited lockers but a container with addi-

tional lockers is being installed• *Each premises has some showers and end of trip facilities

but lockers are not necessarily sufficient, hence the ‘√/X’ showing the detail is not fully satisfied at these premises.

4 Staff Cafeteria with Cater Plus products on site

✓ X ✓ • The main kitchen is at Willow St and the on-going supply of hot food prepared there by Cater Plus is unsustainable for the number of staff located at these premises. There is 5.29m² of café space for each person domiciled at Willow St

• Cameron Rd does not have a commercial kitchen and therefore has limited facilities for preparing food. Accordingly the food provided by Cater Plus at these premises is limited. There is 0.25m² of café space for each person domiciled at Spring St

• Spring St does not have Cater Plus food available on site. There is 0.76m² of café space for each person domiciled at Cameron Rd.

5 Security Systems ✓ ✓ ✓ • All Council buildings have security swipe card access• There are three different (and incompatible) security systems

in Cameron Rd (base building, IR and Council). This increases demands on the FM Team.

Will

ow S

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Sprin

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Cam

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Table 2: Variations between the Three Premises



# Detail Comment

6 Location relative to storage of fleet vehi-cles

✓ X ✓ • Willow St use the TV3 carpark• Spring St has two parks only onsite. One is an accessible park

and the second is used to house the generator• Spring St’s fleet vehicles are parked at the TV3 car park

building • Cameron Rd has some onsite parking but insufficient for all

fleet vehicles• Elizabeth St Carpark building is being used as an overflow

fleet vehicle parking area• Fleet vehicles are not necessarily close enough to the office

premises of those using them.

7 Digital Copy and Mail Team

X X ✓ • Digital copy operates from Cameron Rd and uses a van for deliveries to the other premises

• An FTE has been engaged to replace the need for staff to collect mail from a central point; the FTE now makes deliveries.

8 Customer Service Centre

✓ X X • When customers arrive at Willow St to discuss a building consent they are either sent to Cameron Rd or a member of the building team needs to go to Willow St. This applies to other matters e.g. distribution of keys and signing of contracts with Elder Housing on an appointment basis

• Visitor parking at Cameron Rd is limited as is nearby on-street parking which can create frustrations for some customers

• Building services has a rostered on duty staff member at Willow St to deal with public queries on building consents. However, the rostered person cannot always address the queries hence a person from Cameron Rd is required to come to Willow St.

9 Utility areas ✓ ✓ ✓ • Cameron Rd is well set up with utility spaces which work well• Spring and Willow only have the copier area and separate

stationery cupboards • Moving from Devonport building to Cameron Rd, less

copiers were required in Cameron Rd due to the floor plan of Cameron Rd and more fit-for-purpose utility areas

• More utility areas are required across the three premises than would be required if all staff were located within the one premises.

Will

ow S

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Sprin

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Cam

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# Detail Comment

10 General location, quality of space

• The three premises are geographically separate. Walking time between Willow St and Cameron Rd is between 10 and 15 minutes depending on the fitness level of the person. Flexi desks are provided at Willow St and Cameron Rd for staff who move between the buildings for meetings

• As the number of suitable buildings in the CBD is extremely scarce, Council has had to make do with what has been available

• There is now limited ability to accommodate growth in staff numbers

• Spring St and Cameron Rd provide good accommodation and facilities. Willow St is dated and in need of a revamp to bring it up to standard at a substantial cost.

11 Access to a range of cafes, retailers, other facilities provided by third parties

✓ ✓ X • Willow St and Spring St are located proximate to retail including cafes

• Cameron Rd has very limited access to retail.

12 Choice of car parking for staff

✓ ✓ ✓ • Willow St and Spring St have access to the Spring St and Elizabeth St car park buildings, as well as paid parking on The Strand area and on-street parking

• Cameron Rd has access to the Elizabeth St car park building and on-street parking, but often some distance away

• All premises have good access to public transport, but Cameron Rd has less route options.

13 Quality and response time to IT issues

✓ ✓ ✓ • Digital Services have staff readily available at all three premises as well as an on-line Portal to manage issues

• A call centre for staff is located at Spring St.

14 Emergency Event Management facilities

• Spring St has a generator to provide backup power during a mains outage

• During an event those located at Spring St decant and the emergency services team move in.

15 Receptionist and Visi-tor login system

✓ X X • Only Willow St has a receptionist• All three premises have a visitor login system• Often visitors do not sign in using the self-service login

system at Cameron and Spring St which creates a health and safety risk during an event e.g. it cannot be determined which visitors are in the building at that time.

16 Fibre Optic Cables ✓ ✓ ✓ • Duplicated to enable connectivity at all premises.

Will

ow S

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4. The Staff Interviews and Staff Survey

STAFF INTERVIEWS AND STAFF SURVEY / 16

The triple bottom line measure of the success of an organisation such as Council is directly impacted by the performance of its staff. We interviewed and surveyed staff in order to understand the consequential effect of Council operating from multiple premises, the attributes of the physical premises and their geographical separation.

4.1 Staff Interviews

11 Council staff were interviewed. The interviewees included Council’s CE, General Managers and people who support and/or work closely with the Senior Leadership Team (SLT) on a daily basis.

The purpose of these interviews was to determine how the multiple premises affect the SLT’s ability to effectively and efficiently fulfil their roles, particularly to:

• Provide strong leadership to their Teams

• Interact with their Team members in a timely manner and with sufficient frequency

• Develop and maintain positive relationships with Team members

• Have visibility of Council personnel and across Team relationships

• Realise their required outputs within the hours of the working week and time constraints.

It should be noted that interviewees’ comments exhibited a high degree of consistency across all those interviewed. The extent of effect depended on where and how many premises the interviewee’s Team/s occupied and whether the Teams were split over more than one premises. Not one single person interviewed considered the multiple premises had no or minimal impact on them and/or their Team. We have also sought to identify any benefits the multiple premises provide to Council. Without exception it was the view of the interviewees that the detrimental effects far outweighed any benefits and some stated as much as by “10 fold”.

We have considered whether having a total ‘rethink’ of which Teams occupied which premises could resolve many of the issues that have been identified. We determined from interviewees this was not achievable as

some Teams need to have a presence in each premises e.g. Digital Services, and the size of the floorplates and the interconnection between levels was not designed to accommodate the required Teams and corresponding Team adjacencies.

The main findings from the interviews are contained in Section 4.3 and Section 5, while a comprehensive list of the key statements from the interviewees is attached as Appendix B.

4.2 Staff Survey

In order to understand how Council operating from multiple premises affects all of the occupying staff, we invited these staff to complete a survey. The survey was released in mid-May 2019 via SurveyMonkey. The survey was open for a week. We are advised there are circa 620 staff in total within the three premises and with 310 staff responding to the survey, the response rate was 50%.

The responses were analysed by SurveyMonkey Analytics and are contained in the Appendix A. For Questions 7, 14 and 15, where there was an opportunity for respondents to provide ‘long answer’ comments, due to the length of the responses we have just provided a representative selection in Section 4.3, with the overall findings from the survey contained in Section 5.

4. The Staff Interviews and Staff Survey cont’d

The following are a selection of statements from the interviews and survey.

“I would say it is impossible to develop positive organisational culture for so long as we are separated.”

“Loss in several hours each week in travel between buildings”

“I fully recognise the need for a change in our culture. We cannot drive this across 3 separate buildings.”

“Makes it disjointed and you don’t interact with others on daily basis.”

“The three offices have divided the organisation into groups; sub cultures in each Spring, Cameron and Willow.”

“From a facilities management perspective it uses a lot more time to ensure issues and contractors are reviewed, controlled, monitored and maintained.”

“A large meeting can result in the equivalent of a days’ productivity lost because of the number of people needed to move between buildings to attend.”

“It creates culture issues. It’s a shame we don’t see the people at the other buildings, they must feel left out.”

“It is difficult to build a Team when we struggle to get together.”

“I feel this split has a large impact on the culture of the organisation trying to remove the silos that many parts operate in. Not having a large common staff cafeteria reduces the meaningful water cooler conversations and relationship building opportunities.”“There are a lot of moving parts

of the organisation. We need to work closely together to achieve efficient and effective outcomes. We need to be within the one ‘home’ to do this.”

“Less face to face discussion with staff in other buildings, and less informal interaction which comes when located in the same place.”

“Less time face to face than we should have because of the travel time and space. This has an impact on effective collaboration and encourages silo behaviours.”

“Losing touch with work colleagues and friends gained over 14 years’ service.”

“People hide behind emails – a backside covering culture. Everyone must be visible and accessible.”

“Without the use of electronic signatures, working in different buildings can be challenging when trying to get approvals/sign off for things like procurement plans etc, as activity managers are generally quite busy, which sometimes results in multiple visits for signatures and delays to progression.”

“Half my team is based in Spring St so it is limiting in respect of team meetings etc. We have had one this year.”

“I enjoy the fresh air when walk-ing but this is offset for me 10 fold by the wasted time spent commuting and the barriers our substandard situation places on us.”

“Delays in making a decision about the future of the Willow St building is a concern as we are working above a condemned floor (level 1) and I am concerned about air quality as a result of the buildings weather tightness issues.”

“It is difficult to understand what is going on in the organisation. As a part time worker, you get even more disconnected from people in other buildings.”




“The real impact from my view is it creates barriers and not being inclusive staff members of TCC.”

“Centralise the Council!!!”

“I don’t know who other TCC people are.”

“It gives an air of disorganisation.”

“Travelling between buildings adds time to my day. Still need to complete my work so travel time is added on to my working day in my private time.”

“Disparate customer service. Difficult to find people at any time. Poor team spirit and diminished culture. Insular.”

“Service partners and custom-ers often report to the wrong venue resulting in the need for rescheduling of appointments; it also strains relationships un-duly when this occurs.”

“Feel like a visitor when I visit other sites, don’t know many staff, hard to find staff, disconnection.”

“Detrimental impact.”

“It is really hard to know who works for Council. Teams work in silos and it is difficult to create fun activities within the organisation. People commu-nicate better when they have made a physical connection i.e. eye contact, chat at the coffee machine or just a quick hello in the elevator. I believe if we all worked in one building our pro-ductivity would be up because teams would work more closely together to problem solve. Staff would also build more positive relationships with their colleagues as they would just go chat to individuals rather than having to email.”

“Separating the comms team from the majority of the organisation has led to a significant disconnect and lack of collaboration.”

“We have tools to be mobile like surface hubs yet they are not set up yet. There has been talk about rolling out tools like Skype for business for too long. Also the network set up is crap at Cameron Road.”

“You never quite know where your team are at any time but also it creates silos between teams, one building open plan and fully flexi would be my preference.”

“More formality required to arrange meetings – less easy to have casual ‘accidental’ catch-ups.”

“There are people in the organisation I’ve never seen before or engaged in years of working at TCC that may add value to my role.”

“It takes time to get from one meeting to another and it is a waste of time.”

“Last minute spontaneous meetings nigh on impossible to arrange.”

“If there is an opportunity for all of TCC to be under one roof – it would make a world of difference to the work produced and the culture.”

“It impacts on project planning, engagement and being a cohesive organisation and therefore impacts on our relationship and engagement with the community.”

“Without the use of electronic signatures, working in different buildings can be challenging when trying to get approvals/sign off for things like procurement plans etc, as activity managers are generally quite busy, which sometimes results in multiple visits for signatures and delays to progression.”

“Can’t beat face to face communication – builds Teams, builds great culture.”



The interviewees were also asked: “if there was one thing you could change about Council at this time what would it be?” The following are a sample of the responses received, noting that some people provided more than one response:

• One fit-for-purpose premises for all staff and for the long term

• Premises which can support the culture which Council needs

• Premises which have all staff together, good visibility of our CE and all managers

• Give us a heart, give us a café; a Marae (meeting place)

• It’s so obvious, if people are considered key to the success of this organisation then we need to be provided with the right workplace and this must be a single office

• The key is a fit-for-purpose workplace for TCC, and this means a single premises

• Provide us with a single building – critically important to remove engagement barriers

• Bring everyone together – enable Team bonding and Team building

• Most important is the impact on culture – lack of a sense of belonging due to multiple sites

• Look long term, stop wasting money on short term fixes, sends the wrong message to staff and the rate payer

• One building, built for 50 years. Weathertight. Appropriate; will stand the test of time

• Three separate buildings means we operate as three separate ‘divisions’ of TCC

• Enable us to become more efficient and work as one Team

• Enable us to move projects and initiatives at the necessary pace – take away the barriers created by the separate premises

• Need correct adjacencies

• People need a home. They need to know they belong and matter

• We must have the right spaces, and the right amount of spaces within our one premises which meet the needs of the activity we are undertaking at any one time. This is critical to enable Council as an organisation to fulfil its purpose

• We need a ‘one stop shop’. Everything and everyone under the one roof in the one place together. ‘Tauranga City Council lives here’

• A single premises is the foundation for the right culture. No panacea but a critical component and the right place to start, for the balance to follow through a concerted effort.

5. Summary of the Impacts of Operating from Multiple Office Premises

SUMMARY / 20

This section contains our overall findings on the impacts of Council operating from multiple premises. These findings have been drawn from our investigations, observations, the interviews and the survey. They are described under the following four headings:

• Direct impacts on staff

• The impact on Council’s organisational culture

• Inefficiencies, duplication and increased costs

• The impacts on external stakeholders – the public, suppliers and other parties who interact with Council at Council’s premises.

5.1 Direct Impacts on Staff

The findings from the staff interviews (11) and the survey (310 staff responded - a 50% response rate) have informed our conclusions on the direct impact that multiple premises have on staff. It is accepted that staff who are not required to commute between buildings and have a limited need to interact with colleagues may experience minimal effects of being located in multiple premises. This is evident from some of the comments in the staff survey, however considered to be in the minority.

5.1.1 A Key Inefficiency is the Substantial Time Spent by Staff Commuting Between Buildings, though there is some Upside

The survey results enabled us to determine the number of commutes undertaken by percentage of staff, namely;

• 57% of staff spend < 0.5 hours per week commuting

• 35% of staff spend 0.5 - 2 hours per week commuting

• 6% of staff spend 2 - 3 hours per week commuting

• 2% of staff spend > 3 hours commuting.

If we ignore the 57% of staff who spend less than 0.5 hour per week commuting but consider the balance, and taking a midpoint position for each, it is estimated that approximately 22,000 hours are expended annually in commuting between the premises. At an average hourly staff salary cost of $45.91 ($55m for 1,197,964 available hours in 2018/19) this equates to a salary cost in the vicinity of

$1,010,000 spent on commuting.

Interviewees advised that it was typically a core group of staff who commute the most and they are the ‘more expensive’ staff. The survey affirms this. If the above calculations were undertaken on a rate applicable to the higher salary band, the salary cost would be comparatively higher. When a large meeting is held, the collective commute time of attendees can equate to the equivalent of a day’s (lost) productivity.

Many view commuting as a hassle they could do without and sometimes simply cannot fit into their diaries. Some necessarily incorporate their lunch break into a commute. Meetings are cancelled at the last minute, some staff turn up late, need to leave early or just don’t turn up. This is considered disrespectful to the meeting organiser, but some staff just find it unavoidable. More formal meetings are being held, which take up more time and mean less time ‘on the job’. Most people prefer to walk but some scooter and others use ebikes.

Staff have considered using technology such as Skype to join meetings remotely. To date they have found technology does not support this well and a meeting room is required to be booked in each premises, or staff need to huddle around a computer. Few staff considered this an acceptable replacement for face to face meetings.

It is important to recognise that 35% of survey respondents ranked ‘I enjoy the chance to get out for some fresh air and exercise’ as the best way to describe how they feel about commuting between premises. This benefit should not be overlooked when determining Council’s long term accommodation solution. An increasing international trend is for organisations to encourage ‘walking meetings’ where staff walk and talk so they enjoy fresh air and an opportunity to get out of the office. This also frees up meeting spaces for those who need to meet within a seated arrangement. However that is quite a different proposition from unproductive commuting time and is obviously weather dependent and only suitable for small meetings. Fresh air can also be enjoyed through the incorporation of an open deck or courtyard area within the staff cafe.

SUMMARY / 21

5.1.2 Relationships, Decision Making and Staff Satisfaction are Hindered by Physically Disconnected Premises

Having established relationships with colleagues is very important to staff, but the geographical spread hinders this. Relationships become siloed across premises and often do not develop or struggle to be maintained, with some staff experiencing a sense of isolation and lessened job satisfaction. Staff know fewer colleagues, which results in more formal and longer meetings. Bump conversations cannot happen with someone in another premises. At times staff do not have the time in their diary to commute to see their Teams or colleagues, so they do not. Even with the best endeavours, the multiple premises are considered by many as a barrier to developing and maintaining relationships across the organisation and it is difficult to create a sense of Team.

The fragmented working environment also hinders timely, quality and informed decision making. Often face to face conversations are replaced with emails which has resulted in a noticeable increase in email volume. Emails can be misinterpreted, procrastinate a decision and some staff are known to hide behind an email. At times decisions which should be able to be made quickly take an unreasonably long time to be made, which impacts on productivity.

If these obstacles to staff interaction were removed, staff satisfaction would be expected to increase, potentially reducing the staff churn rate which in the first 12 months of employment with Council currently stands at 23%. This means nearly a quarter of employees leave within the first year of employment with Council. This means nearly a quarter of employees leave within the first year of employment with Council. The cost of managing the time leading up to and the exit of an aggrieved employee, the procurement of a replacement, their training and elapsed time until they become fully productive is conservatively estimated to be between three and nine months’ of the staff member’s salary. It should be noted that this does not consider the potential applicants who may be deterred from employment with Council due to the inferior premises arrangement.

The message from the interviews and surveys was clear; that the multiple premises impact negatively on relationships, both within the staff and with external

stakeholders.

5.1.3 Staff Health and Safety, Wellness and Wellbeing

Based on the hours spent commuting, and interviewees’ advice that some staff are having to work longer days to make up for their time spent commuting, it is fair to conclude this affects the wellness and wellbeing of staff.

We are advised that over the past 12 months Council staff have taken an average of 5.5 days leave due to illness or for wellness and wellbeing reasons. The Southern Cross Wellness in the Workplace analysis states the average is 4.4 days per employee per year. There could be several reasons why Council’s rate is 25% higher than average, but it is reasonable to conclude that the impact of the working environment influences this to some extent.

The wellness of people is enhanced from feeling they belong; however some staff feel uncomfortable in premises where they are not domiciled. Single fit-for-purpose premises would increase the sense of inclusivity and the development and maintenance of good relationships, providing staff with an increased sense of being valued and increased job satisfaction.

As mentioned above, many staff consider the ability to get outside and walk between premises is positive, but the positives are considered to be outweighed by the overall negatives of being split over multiple premises. The survey asked staff to advise if they had experienced any Health and Safety incidents, near misses, or occurrences that have affected their wellbeing when travelling between sites. Whilst limited incidents have been reported to Council’s Health and Safety Team, 12% of staff answered yes and provided further detail which included:

• A range of and many near misses with a car/bus/ebike/scooter

• Slips or trips on the footpath

• Falls from bike/scooter

• Many complained of being accosted/approached/verbally abused/asked for money/spat at by the homeless

• The weather was a contributing factor for many,

5. Summary of the Impacts of Operating from Multiple Office Premises cont’d

SUMMARY / 22

including getting wet and having to remain in wet clothes for the balance of the day

• While there are routes between the premises which are safer than others, they do not necessarily have veranda cover to provide protection from the weather.

Overall, staff feel they receive mixed messages from management; they are told they are important to the success of the organisation but consider they are poorly treated insofar as the office accommodation is concerned.

5.2 The Impact on Council’s Organisational Culture

Whilst analysing Council’s culture in detail is beyond the scope of this report, we have considered how the current multiple premises hinders the development of a single organisational culture.

It is widely acknowledged that good organisational culture is important for the following reasons:

• Poor organisational culture can lead to a 50% increase in a business’ health related costs

• Stress is the single most attributable factor and can increase staff churn by up to 50%

• Disengaged employees can have 37% higher absenteeism, make 60% more errors and be 18% less productive

• Building relationships and a sense of belonging are the fundamentals to the development of a strong culture.

Interviewees consistently expressed their concerns that the geographical spread of the multiple premises has been a key contributing factor to the development of a siloed organisational culture.

It is widely accepted that Council’s organisational culture has been suboptimal for some time now. As explained at the Council meeting held on 16 April 2019, the CE has initiated a change in culture, but he explained “it is not like flicking a switch” and this will take time as it involves, people, processes, systems, structures and leadership. There is a drive to change the organisational culture so it is one single culture; a culture that is outcome focused

and resonates through to the community. Affirmation of this change process was acknowledged by Max Pedersen of Max Pedersen Consulting when engaged to undertake a review of four Council projects which failed to meet expectations. It is Mr Pedersen’s view that consistent failings across the four projects derived from a culture of staff working in silos and being task focussed. A culture which has a primary focus on completing projects rather than facilitating the best outcome for the community.

A number of interviewees reflected positively on the difference in the leadership style of the current CE and his approach to empowering staff, developing transparency and looking at how things can be done better, which they considered to be a significant shift from a previous ‘blame culture’. However, many commented that the CE, and indeed many of the SLT, are not visible to all staff frequently enough. Staff want visibility of their CE, SLT and colleagues without the need for unproductive commuting. Unless all staff are located within the one premises this is unlikely to be achieved.

A single fit-for-purpose premises is therefore considered a critical foundation for a healthy organisational culture; one where people are part of the wider Council Team which is inclusive, has clear values and is outcome focussed. The unanimous view is that as long as Council has multiple geographically separated premises, the organisational culture will remain substandard.

A total of 61% of survey respondents said that on a scale of 1 to 5, with 1 being of the greatest impact, that they rank the multiple premises as having a rank of 1 or 2 with regards to how it impacts on Council’s culture.


SUMMARY / 23

5.3 Inefficiencies, Duplication and Increased costs

5.3.1 Occupation Density and Premises Preferred by Staff.

Total m² of floor area occupied by Council for office premises is 7,263m². Based on 620 staff this provides 11.7 m² per person which is considered a reasonably efficient use of space when compared to industry standards, and particularly as this area includes Council Chambers and Councillors’ Lounge. Although this illustrates that Council is using the space within the three premises efficiently, the respective quality varies across the three premises, as does how the space is utilised. 30% of staff surveyed use a workstation in more than one building which is an example of a duplication of resources which could be better utilised, albeit there is an element of daily ‘swapping’ of desks amongst staff. With two of the premises being near capacity, finding a flexi desk can be a challenge which means staff are often separated from their Team and the resources necessary to do their job.

The survey asked staff to rank the three premises in order of their preference. 62% of the surveyed staff ranked Cameron Rd as their preferred premises with Willow St being preferred by 25% and Spring 15%.

A sample of reasons provided by staff for their ranking:

Cameron Rd 1st:

• Because it is the biggest so can fit all the Teams my Team work with which makes life easier

• Because of the facilities only. I would prefer the location of the other buildings

• Is a modern building, well laid out floor plan

• Is a much nicer building to work in, but I think it would be better for the health of the CBD to have Council located more centrally

• Because it has the majority of people I interact with in one space so there would be less travel required and it is a nice environment

• New building, great set up, light and bright

• The building is larger with more staff having the ability to communicate one on one

• Has more facilities and more lockers. It is also more open and has more opportunities to interact with other Teams and learn more about what the organisation does. Willow St also has this on smaller scale as I feel Spring St is just too crammed and small.

Spring St 1st:

• It’s a nice office to work in

• I put Spring St as 3 as I don’t go there often so don’t have a feeling of ‘belonging’ to that site – it feels like other staff’s space, not one that I could use freely

Willow St 1st:

• Location – it’s close to the library, the waterfront, shops, bars and cafes

• Our team needs to be located next to chambers and elected members

• I prefer the location of Willow St, it is more central and the connection to Chambers. Would prefer to all be together closer to the CBD.

These comments highlight what is important to staff, including the quality of the premises, where their Team is located, and the location of the premises relative to the CBD. All are factors which are considered when determining what comprises fit-for-purpose office premises.

To bring some perspective to the premises cost, the total annual cost of leasing premises for an organisation is usually less than 10% of annual salary cost. Economies of scale could reduce the annual lease cost e.g. the larger the floor area of the leased premises the greater the negotiating strength of the tenant on the lease rates, landlord contribution to works and other development lease terms and conditions. Leasing multiple premises diminishes the negotiating strength of the tenant.

Post a disaster event the occupation of multiple premises which are geographically separated may benefit Council e.g. one or two buildings may not be impacted and Council could consolidate and operate from them for a period of time. However this business continuity risk is considered able to be cost effectively managed through


SUMMARY / 24

Council occupying a modern building of good design, built to current building code and >80% of New Building Standards, and in conjunction with cost effective risk management tools.

These comments highlight what is important to staff, including the quality of the premises, where their Team is located, and the location of the premises relative to the CBD. All are factors which are considered when determining what comprises fit-for-purpose office premises.

To bring some perspective to the premises cost, the total annual cost of leasing premises for an organisation is usually less than 10% of annual salary cost. Economies of scale could reduce the annual lease cost e.g. the larger the floor area of the leased premises the greater the negotiating strength of the tenant on the lease rates, landlord contribution to works and other development lease terms and conditions. Leasing multiple premises diminishes the negotiating strength of the tenant.

Post a disaster event the occupation of multiple premises which are geographically separated may benefit Council e.g. one or two buildings may not be impacted and Council could consolidate and operate from them for a period of time. However this business continuity risk is considered able to be cost effectively managed through Council occupying a modern building of good design, built to current building code and >80% of New Building Standards, and in conjunction with cost effective risk management tools.

5.3.2 Duplication of Facilities and Amenities

A single fit-for-purpose premises would include facilities and amenities of the appropriate size, quantity and appointment for the occupying staff.

Duplication of facilities through having multiple premises, which in many cases increases floor area and cost, is evident in:

• Café facilities

• Workstations

• End of Trip Facilities

• Bathrooms

• Utility areas and equipment e.g. photocopiers and workbenches

• Entrance Lobbies

• Security systems

• Technology Infrastructure.

We were also consistently told by interviewees that Council lacks a ‘heart’; a place where all staff can come together with their colleagues to share good coffee and good food. None of the premises currently provides this. They each have a staff café of a sort but we were told that Willow St has the space and good food but few staff go there, Spring St is small and lacks a soul with ‘bring your own’ food, while Cameron Rd has an inviting space but the food is not great.


SUMMARY / 25

Cater Plus has a contract with Council to provide good quality food prepared and cooked on site for Council staff. The current multiple premises compromises Cater Plus’ ability to deliver food under their contract and increases their time to service Council. Their ability to generate revenue has been compromised which under the risk sharing arrangement with Council has resulted in increased financial cost to Council. Cater Plus’ time to service Spring St and Cameron Rd, instead of one single premises at Willow St, also means Council pays Cater Plus an additional Cameron Rd does not contain a commercial kitchen and therefore Cater Plus cannot prepare food at these premises. A no-win situation which is unlikely to be remedied cost efficiently whilst three premises are occupied by Council.

As these and other amenities vary in quality across the three premises, in some cases this fosters a ‘them and us’ culture and a perception that Council values some staff more than others.

5.4 Impacts on External Stakeholders

The expectation by the public is that they can visit Council at Willow St and have their questions answered within a reasonable timeframe. Whilst staff make best endeavours to achieve this, it is not always possible. It may be that the required staff member is located at Cameron Rd and when called may not answer their phone or have the available time in their diary to commute to Willow St to meet with the customer. Video conferencing is considered too difficult to use. If the customer is sent to Cameron Rd, parking on site or proximate is limited and sometimes impossible, and the visitor self-login system is intimidating to some and simply not used in a number of cases. Whilst Council staff use their best endeavours to provide a good experience for external stakeholders, the geographical spread often undermines the customer’s experience.

From an operational perspective, staff advise that deliveries by suppliers are frequently made to incorrect premises; up to twice daily. These occurrences create delays and frustrations and require the time of support staff to resolve. Often the Council is considered at fault by the supplier (regardless of whether or not they are).

Our overall conclusions, recommendations and suggested

next steps are provided within the Executive Summary. We will be pleased to answer any questions you may have.

We would like to acknowledge the co-operative and diligent contribution from all Council staff who assisted with this impact assessment.


APPENDIX A / 26

Appendix A - Staff Survey

66.67% 204

16.99% 52

16.34% 50

0.98% 3

Q1 Where are you normally based?Answered: 306 Skipped: 4

Total Respondents: 306

Cameron Road

Spring Street

Willow Street

Elsewhere

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

ANSWER CHOICES RESPONSES

Cameron Road

Spring Street

Willow Street

Elsewhere

1 / 15

Multiple premises analysis

29.32% 90

70.68% 217

Q2 Do you use a workstation in more than one building?Answered: 307 Skipped: 3


Yes

No

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%


Yes

No

2 / 15


17.92% 55

39.41% 121

31.92% 98

10.75% 33

Q3 How often to you interact face-to-face with TCC personnel at TCCpremises other than your main one?

Answered: 307 Skipped: 3


I don't

No more thanonce a week

Between twoand five tim...

More than fivetimes a week

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%


I don't

No more than once a week

Between two and five times a week

More than five times a week

3 / 15


51.48% 157

34.75% 106

10.49% 32

3.61% 11

Q4 How often do you interact face-to-face with members of public atTCC premises other than your main place of work?



I don't

No more thanonce a week

Between twoand five tim...

More than fivetimes a week

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%


I don't

No more than once a week

Between two and five times a week

More than five times a week

4 / 15


57.00% 175

35.18% 108

6.51% 20

1.95% 6

Q5 How much time do you spend travelling between TCC premises forface-to-face interactions in a normal working week?



Less than 30minutes

Thirty minutesto two hours

Two to threehours

More thanthree hours

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%


Less than 30 minutes

Thirty minutes to two hours

Two to three hours

More than three hours

5 / 15


90.29% 279

2.91% 9

8.41% 26

12.62% 39

5.18% 16

Q6 How do you generally travel between the offices?Answered: 309 Skipped: 1


Walk

Scooter

Bicycle

Car

Other

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%


Walk

Scooter

Bicycle

Car

Other

6 / 15


88.03% 272

12.30% 38

Q7 Have you had any health and safety incidents, near misses, oroccurrences that have affected your wellbeing when travelling between

the premises?Answered: 309 Skipped: 1


No

Yes

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%


No

Yes

7 / 15


Q8 Please rank on a scale of 1-5 the impact that you consider havingmultiple premises has on your productivity, 1 being significant and 5

being little or none.Answered: 306 Skipped: 4

6.86%21

17.65%54

27.78%85

23.53%72

24.18%74

306

3.41

1 2 3 4 5

(no label)

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

1 2 3 4 5 TOTAL WEIGHTED AVERAGE

(no label)

8 / 15


Q9 Please rank on a scale of 1-5 the impact that you consider havingmultiple premises has on the culture of your team, 1 being significant

and 5 being little or none.Answered: 305 Skipped: 5

13.11%40

20.98%64

20.98%64

23.28%71

21.64%66

305

3.19

1 2 3 4 5

(no label)

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%


(no label)

9 / 15


Q10 Please rank on a scale of 1-5 the impact you consider havingmultiple premises has on your ability to work effectively with teams

which are located in a different premises to you, 1 being significant and5 being little or none.


18.09%55

27.30%83

18.75%57

22.70%69

13.16%40

304

2.86

1 2 3 4 5

(no label)

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%


(no label)

10 / 15


Q11 Please rank on a scale of 1-5 the impact you consider havingmultiple premises has on the culture of TCC as a whole, 1 being

significant and 5 being little or none.Answered: 305 Skipped: 5

30.82%94

30.16%92

19.02%58

13.77%42

6.23%19

305

2.34

1 2 3 4 5

(no label)

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%


(no label)

11 / 15


Q12 Please rank the 5 statements below in the order in which they bestdescribe how you feel about travelling between the premises, with 1

best describing how you feel and 5 least describing how you feel.Answered: 306 Skipped: 4

16.17%43

31.95%85

21.80%58

18.80%50

11.28%30

266

3.23

11.58%30

17.37%45

18.53%48

29.73%77

22.78%59

259

2.65

5.13%14

7.69%21

17.22%47

21.61%59

48.35%132

273

2.00

32.53%95

24.66%72

26.37%77

12.33%36

4.11%12

292

3.69

34.65%105

15.84%48

18.48%56

14.85%45

16.17%49

303

3.38

It depends onthe weather...

It’s waste ofmy time

I don’t attendmeetings in...

My time couldbe more...

I enjoy thechance to ge...

0 1 2 3 4 5 6 7 8 9 10

1 2 3 4 5 TOTAL SCORE

It depends on the weather e.g. too hot, cold, wet

It’s waste of my time

I don’t attend meetings in other premises because it is toomuch of a hassle

My time could be more productively used

I enjoy the chance to get out for some fresh air andexercise

12 / 15


Q13 Rank in order of your preference, with 1 being your most preferred,and 3 being your least, the building you would prefer to have as your

main place of work.Answered: 303 Skipped: 7

62.46%183

18.77%55

18.77%55

293

2.44

15.96%45

43.97%124

40.07%113

282

1.76

25.61%74

34.60%100

39.79%115

289

1.86

Cameron Road

Spring Street

Willow Street

0 1 2 3 4 5 6 7 8 9 10

1 2 3 TOTAL SCORE

Cameron Road

Spring Street

Willow Street

13 / 15


Q14 Please say why you chose your number one-ranked building.Answered: 298 Skipped: 12

14 / 15


Q15 Please add any other comments about the impact that workingfrom three premises has on you and/or the organisation.


15 / 15


APPENDIX B / 27

Appendix B - A Comprehensive List of the Key Statements from the Interviewees

1. Culture: Expectations and philosophy which guides, influences and empowers the behaviour of Council staff. The

values and vision upon which Council staff make decisions and develop relationships. The way Council ‘does things’

because it is the ‘right thing to do’.

• Council’s culture within parts of the organisation is very unhealthy and the further fragmentation which the multiple

premises creates does not help us to correct this.

• Each premises has its own twist on Council’s culture but for so long as Council is located in multiple premises it will

not be possible for us to develop a single positive organisational culture.

• New staff fall into the sub-culture of their Team within their premises, which is not necessarily good.

• Culture must be led from the top but the CE is not visible to all, nor are some of us, as Leaders.

• It is hard to lead my Team and develop a strong team culture when I struggle to have time to get to other premises

to see them.

• No sense of Team which is so important when challenges arise with the community. • Cameron Rd premises is the

best of all three, it has natural light, is modern, clean and feels calmer, Spring St is crammed into one space, but ok

where as Willow St is the worse with a ‘stiff’ culture/impersonal/unfriendly and decrepit.

• Willow St has done its dash. It is time we had premises which support us in our roles.

• I heard a Councillor say that Willow St feels 3rd World.

• Cameron Rd illustrated how bad Willow St was so there has been some upgrading there, but let’s do it all properly

• Very much a silo culture, different in each building.

• The variances in the quality of premises has created a ‘them and us’ culture. Some staff feel that they are viewed as

more/less valued than others.

• I avoid Willow St where at all possible. An unhealthy and depressing environment.

• If Council really values its staff it would provide us with decent premises, and one premises of equal quality for all.

• There is no heart to our office accommodation. We need a large cafeteria space where we can come together to

recharge. A vital organ for developing a good culture.

• A café where people want to go and positively engage with their Teams and wider colleagues – quality coffee and

good food, fresh air. Large tables to encourage inclusivity, smaller tables for quieter moments. It would be great for

Council to be like a community. Provides context for familiarity.

• There have been more than enough moves, it is disruptive and makes Council as an organisation look disorganised.

Let’s move once more into fit for purpose premises.

• The relocations and limitation of available buildings has meant we have gone from a rabbit warren at Willow St to

ultimately open plan at Cameron Rd. This has forced us to change and most people consider open plan works with

the right support areas. This has to be a benefit and a step in the right direction for when we move to our long term

arrangement.

• Give us a heart; a marae (meeting place).

• There are some very loyal staff at Council but how can we expect to retain quality staff and attract new ones when

our premises fragment us and we have such an unhealthy culture. Our current culture has developed over many

years so it won’t be quick to fix but we need to start by coming together in one premises so we can work towards

being a united team.

APPENDIX B / 28

Appendix B - A Comprehensive List of the Key Statements from the Interviewees cont’d

• We need to feel safe – able to have a whinge or moan in a safe environment which should be within our all inclusive

offices.

• Aim is to create one single culture; a culture that resonates through to our community.

• From a cultural perspective it is important to consider the Hapu activists’ behaviour should Council agree to

undertake redevelopment of the Civic Centre. Important to engage with them early and include their story in our

new building.

2. Relationships: Vertically and horizontally within Council; with Team members, peers, colleagues and customers.

• Hard to create a sense of Team.

• Even with the best endeavours because my Team is split over more than one premises, and even worse in different

premises to me, it is hard to develop and maintain great relationships with them.

• As a manager who commutes between premises frequently I have better visibility (but still not great) of the wider

Council Team than many of my colleagues.

• Team members who are new to Council have very limited ability to get to know our Council Team but rather develop

relationships within their premises only. This limits knowledge sharing.

• Hard to have ‘5 min’ impromptu discussions.

• The lack of facilitation of relationship development is a problem when my Team need to work with a person located

within another premises as their relationship is cold and communication often needs to be done by email or phone.

• Meetings and conversations which are not to face see nuances missed which makes it harder for me to grow a

healthy culture.

• When relationships are cold we find discussions are more formal, which is not usually helpful when trying to work as

a Team.

• Inhibits cross pollination and organic development of relationships.

• Conversations often need to be delayed to accommodate formal face to face meetings as at least one person need

to commute to meet.

• Some people take advantage of the opportunity to hide behind emails because they don’t have to face the people

with who they are communicating.

• I understand that the premises are at capacity and as they have been secured and fitted out on an ad-hoc reactive

basis, and with the absence of the long term picture in mind, team adjacencies are not necessarily right. This is a

barrier to easy communication with the people we need to be working with on a daily basis.

• Some of my team feel isolated because they are separated from the balance of their Team. • I lose time and

relationship opportunities.

• The only benefit I can think of is during commutes the chance meeting of other staff who I would not otherwise

bump into. An invaluable benefit but one that a single office workplace could also provide.

• Limited ad-hoc collaboration; formal meetings instead.

• Because our Team is isolated there is a lack of visibility by the rest of Council as to what we are doing on a daily basis.

Assumptions are made. Creates barriers to healthy relationships.

• Because it is a hassle to find someone, people just don’t.

• Being isolated means less interruptions; I suppose that could be considered a benefit.

APPENDIX B / 29


• I know people in our premises so much better. I do not know a lot in the other premises. • Social silos in buildings.

I do not socialise with people in other buildings.

• Face to Face creates and fosters good workplace relationships.

• Good relationships are critical to good company culture but it is hard for many of my Team to get to know the new

Chief Executive because of his limited visibility in Devonport Rd and Spring St premises.

• There are times when customers come to Willow St to connect with Cameron Rd located staff. This takes time to

sort out, creates delays for matters to be addressed and is frustrating for everyone. We are considered in the wrong

for not be smarter about our office arrangements.

• Deliveries are made to Willow St when they should have been to Spring St or Cameron Rd. Even more time is wasted

resolving the matter.

• I see the new CE more than the old CE but still not enough. Understandingly he is busy and in another building to

the majority to other Council staff.

3. Decision Making: By all staff on a full spectrum of matters; minor to significant, operational, strategic, requiring

input from a single person to a large team, over a concentrated or prolonged period of time

• The physical separation limits the ability to have ‘bump’ conversations with my Team.

• I generally only visit other premises for a specific reason so there is limited time while there to casually catch up with

people on an informal basis.

• The ability to have brief and impromptu conversations is often invaluable to making timely decisions but that is not

possible when we are so geographically distant from one another. It is impossible to ‘bump’ into someone in another

premises.

• Necessarily formal decision making processes replace informal discussions. I find this sometimes prohibiting to

effective decision making because some people are less comfortable to voice their opinion when in a formal setting.

• More input time required, creating delays and complexity to find solutions.

• People are just not able to get to attend a meeting instantly; a 15 minute lag.

• I need to make some decisions in isolation, or not includes everyone that should be because it is too hard to get

everyone that should be involved together.

• Do not attend 50% of meeting requests because I cannot justify the time to travel; half an hour travel for half an

hour meeting.

• I make a conscious decision to not meet with some people because the commute and lack of available meeting

spaces makes it too hard.

• If I was in the same premises as everyone else I get achieve must more timely solutions, make better progress in my

day.

• Emails often need to replace face to face meetings. This has resulted in an increased number of emails, fragmented

and often not fully understood perspectives which then requires additional communication to get the necessary

clarity and required information to inform decision making.

• Decision making reflects the black hole effect; assumptions are being made because it is ‘too hard’ to come together

for inclusive discussions.

APPENDIX B / 30


• I can spend a lot of time trying to track someone down, and sometimes I simply give up.

4. Inefficiencies: Unable to accomplish something with the least waste of time and effort; incompetency in performance.

• One of the greatest inefficiencies is related to my need to commute between premises and more than once a day.

It is a hassle I could do without.

• Management of diaries is extremely challenging as time must be allowed for the commute. I allow 15 minutes to

commute between meetings.

• I enjoy the commute and just simply allow 15 minutes before and after onsite meetings. Yes, when having two

offsite meetings in a day that adds up to an hour when I could be productive but Council must understand this is a

consequence of splitting up the organisation.

• Often it is the more ‘expensive staff’ commuting. Such a waste of resources.

• I try to make calls when commuting but this is definitely iffy in terms of hearing and participating properly. Sometimes

the wind makes it too hard for the other person to hear what I am saying.

• It is common for people to turn up late to a meeting, need to leave early or arrive at the wrong premises. I find this

very frustrating, unprofessional and especially disrespectful to the organiser of the meeting.

• It is good to visit the other premises otherwise I don’t interact with those people. Ideally we would be in one

building so we could interact without the commute.

• I love the walk, it awakens my brain and I use the time to process information.

• Not infrequently more than one person (sometimes up to five) will go from one premises to another meet with a

single person and perhaps for only 15 minutes. How can this make sense? A significant drain on otherwise productive

resources.

• When all in Willow St we worked at our desks until our item came up on the agenda at a Council meeting, now we

spend sometimes the best part of half a day at Willow St working waiting to be called up – I am away from my team

and not otherwise accessible, unless people want to commute to see me.

• I split the commute I sometimes meet people half way in a café but only splits the inefficiency between us both.

• Emails are replacing face to face communication, increasing the volume of emails and the time to address the

• Lack of visibility of staff.

• More formal meetings are being held, which take up more of my time. Less time is spent ‘on the job’.

• Loss of efficiencies need to be made up through working longer days.

• Insufficient meeting spaces in Spring St means we need to book a meeting room in Willow St. Sure, only a short walk

but all of this wasted time adds up.

• Walking is how most of us commute.

• A scooter is faster than walking, but by the time I get a helmet on/off it is not necessarily so and I need to bring my

back pack to carry my things.

• Ebikes are used by some but because Spring St does not have onsite bike parking it is faster for me to walk to

Devonport Rd than to collect a bike from the TV3 Car park.

5. Resourcing: Of staff and the physical office premises spaces.

• There is a need for an allocated desk at my ‘home’ premises and I also use of a flexi-desk at the other premises which

APPENDIX B / 31


creates an unnecessary duplication of resources and increases the total space required.

• There are three cafes for Council staff but none of them are fit for purpose. Willow St has Cater Plus providing good

food but there is hardly anyone there so not a great place to socialise, Cameron Rd café is a good space but the food

is not, and Spring St is not catered at all and the space is average.

• I could not say how many but it is obvious that more staff are needed because of the inefficiencies we experience

due to having to manage multiple premises and staff operating from physically separate and geographically spread

premises.

• Have had to increase staff resourcing in mail room because of separate offices.

• I need a desk at every location; 3 x desks.

• There are probably enough printers at Cameron Rd to meet the needs of the total Council staff but we need extras

because of the multiple premises and because they are not well designed for a large organisation.

• To avoid commuting Skype is being recommended but then there will be a need to book a meeting space which has

VCR facilities at two premises and when there is already a shortage of meeting rooms. How does this make sense?

A group huddling around a computer screen for a Skype meeting just doesn’t work.

• Flexi-desking and commuting costs me around 2.5 hours per week in lost productivity. Firstly I need to find a desk

then I am disconnected from my Team mates so discussions are restricted and I do not have access to the physical

resources I need to do my job. On top of this are commute times. Demoralising.

• Limited break out spaces for soft conversations.

• The Contact Team are working on top of each other – too cramped but what are the options?

• Within one appropriately modest building we need to have the right types and number of spaces critical to enable

Council as an organisation to fulfil its purposes.

6. Health, Safety, Wellness and Wellbeing: The holistic safe and healthy wellbeing of staff

• It is great to get outside and walk between premises during the day but the associated positives are far outweighed

by the overall negatives of being split over multiple premises.

• The weather (rain, sun, wind) can sometimes make the commute very uncomfortable.

• Traffic can extend my commute time by up to 10% and multiply my risk to safety by 100%. Some uncontrolled

intersections are congested at peak times and cars are going in all directions including making erratic U turns. People

often don’t see us pedestrians.

• Going from a temperature controlled environment to an uncontrolled environment outside is not good for us

• Umbrellas are not suitable on a windy day and impractical to use when carrying other items.

• The route between premises which includes pedestrian crossings is sometimes avoided because there are fewer

verandas over footpaths and I am therefore less protected from weather. This route increases the risk of incidents

with vehicles when crossing the road but keeping dry or out of the sun is important to me.

• Mixed messages; staff feel they are poorly treated insofar as the accommodation is concerned but then we are told

how important we are to the success of the organisation.

• Lack of visibility of emotional level across Teams when not located with them. No ability to monitor the soft factors.

• Inability to appreciate other parts of the business so inappropriate communications occur which reinforces the

building based silos.

APPENDIX B / 32


• I need to work longer days because of the need to make up the ‘lost’ time spent commuting during the day. My

working day is longer now than when we were all in Willow St, but I am achieving less.

• I have had to replace dress shoes with practical flats and added toe and heel plates as soles were wearing out inside

a month.

• I now wear trousers as warmer in winter and more practical on windy days; no choice.

• Sunburn in summer is a problem. I tried using a hat but a cap blows off and a straw hat is too bulky to store between

commutes so I now try to remember to apply sunblock.

• If walking through Elizabeth St car park building I sometimes need to dodge reversing cars.

• There is a need to be productive whilst commuting but using devices when moving amongst traffic can be risky.

• It gets dark early in winter and it feels unsafe walking in some areas between premises after dark.

• People who are less physically able to walk between premises sometimes simply need to be left out of meetings and

therefore we are not being inclusive.

• The Contact Centre due to Team adjacencies and compact space has increased the immediate noise levels resulting

in lower staff resilience and higher levels of fatigue.

• No one space where everyone can relax and catch up e.g. café.

• A benefit from a disaster management perspective is that having multiple premises provides an element of business

continuity risk management.

• We should be part of our community so we should be in the CBD – if we support it it will support us.

14 February 2020

Tauranga City Council

Sent via email: [email protected]

Dear Mr Powell,

90 DEVONPORT ROAD OPPURTUNITY

As you are aware, Willis Bond & Co is currently developing a scheme for the redevelopment of 90 Devonport Road. This process will take a number of months while we carry out our due diligence and scheme development process.

We are working closely with Craigs Investment Partners as anchor tenant and have engaged Warren and Mahoney as architects, along with a number of other consultants, to assist in working through schemes that would best maximise the efficiency and positive urban impact of the development.

The further we progress, the more the team believes that the development presents a unique opportunity for the Tauranga City Council to consolidate under one roof in a flexible, cost effective, green star rated development. Such a co-location with Craigs will also provide cost efficiencies.

Based on the site’s close proximity to the Farmers development, the revitalised Durham Street and the latest Tauranga University Campus, we believe this move could create a real critical mass in this part of the city that would meaningfully contribute to regeneration of Tauranga’s CBD.

We believe that the critical mass created will support the creation of real amenity and activation in the area, which will in turn enable and facilitate further development in the wider CBD. In the absence of Council as a tenant, the development will initially be smaller scale and it will take much longer to achieve the full positive impact from the development on the wider city.

We welcome the opportunity to work with Council to explore the idea of Council locating onto the site alongside Craigs and other tenants. In order for the development to be feasible it would be necessary for Council to commit to a medium-term lease.

We would like to invite all councillors and key staff to visit Wellington or Auckland over the coming months so that we can showcase the quality of development we have in mind for this site and highlight what is possible when critical mass is established in a particular area- and evidence the activation that can happen as a result.

We would appreciate early feedback on this idea as we are currently devoting significant resources to the design and planning of this development. The sooner we can get feedback from Council as well as better understanding its requirements, the sooner we can get work underway on testing the feasibility of this idea.

I look forward to hearing back from you.

Kind Regards,

Mark McGuinness

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TAURANGA CITY COUNCILInformation shown on this plan is indicative only. The Council accepts no liability for its accuracy and it is your responsibility to ensure that the data contained herein is appropiate and applicable to the end use intended.

Meters76.540 38.27

1:1178 @A4

±

Matter No. 019557012

.

Tauranga City Council – Blocks A, B and C, 91

Willow Street

Prepared for: Tauranga City Council

Date: 8 August 2019

Version DRAFT 1.0


Prendos New Zealand Limited | 1

1.0 Executive Summary 2

2.0 Preface 2

3.0 Introduction 3

4.0 Defects Summary 3

5.0 Conclusions and Recommendations 14

Appendix A Beca HVAC Platform Letter 17/09/2018

Appendix B Beca/Thermosash Report and Beca Revised Seismic Score Report 18/082015

Appendix C HVAC Design Report 30/07/2019

Appendix D Asbestos Management Survey 09/07/2019

Appendix E Aotea Security Letter February 2019

Appendix F Beca Fire Report 10/07/2014

Appendix G Aon Fire Sprinkler System Report 18/10/2017

Appendix H Air Matters Report 18/06/2019

Appendix I Electrical Audit From Eagle Eye Engineering 06/08/2019

Appendix J Rexel Lighting Solutions Audit 06/08/2019

Appendix K Prendos TCC Reports A, B And C 2015



1.0 Executive Summary

The original Tauranga City Council Building was constructed in 1989 and consisted

of retail spaces at ground floor level, offices at first floor level and a vehicle parking

at second floor level. Due to ongoing issues with weather tightness and water

ingress, the second floor was enclosed with the addition of offices in 2003. The

north elevation of Block C was reclad in 2006. The widows and cladding were

poorly installed resulting in water ingress.

Block A consists of I-Site, NZ Police Services and temporary offices which are used

by UFTI at ground floor level, the office spaces at first floor level are vacant and

Council Chambers are located on the second floor. Block B consists of Public Library

services at ground and first floor level with the Library offices and Café located on

the second floor. Block C consists of the TCC Customer Services at ground floor

level, vacant offices at first floor level and the TCC Mayor and CEOs offices are

located on the second floor.

The three storey building envelope comprises a concrete and steel framed support

structure. The external walls are a combination of rendered and painted concrete,

fibre cement panels at ground and first floor level, and a face sealed aluminium

composite panel (ACP) cladding system at second floor level. The pitched roof

structure comprises factory finished steel roof sheeting with the addition of a raised

mono pitch roof structure over the Council Chambers. This is finished externally by

a face sealed bronze aluminium composite panel (ACP) cladding system. The roof

comprises a sheet roof covering. The internal finishes comprise a combination of

ceramic floor tiles in the common areas and carpet tiles in the offices, plastered

and painted, and suspended ceiling panels.

Among other issues, the buildings have been beset with weathertightness issues

for a number of years. Leaks are associated with roof coverings and window

joinery. There are numerous deficiencies both externally and internally.

The first floor to Blocks A and C were vacated in 2015 following our inspections and

report findings and these areas remain unoccupied. These floors continue to have

leak issues. There are clearly evident passive fire deficiencies and numerous other

fire compliance issues. The majority of HVAC installations are dated and no longer

fit for purpose and are life expired. The electrical services are dated and non-

compliant. The lighting installations are inefficient and life expired.

Further detailed investigation in relation to the following issues are recommended:

Passive fire, sprinkler system and other fire compliance issues

Undersized HVAC platform

Lift installations

Access audit

Based on the findings in this report and those of supporting appendices reports, we

recommend that TCC carries out a detailed costed study into the viability and

feasibility of properly remediating the three blocks as opposed to demolishing them

and building a fit for purpose council office building.

2.0 Preface

This report has been produced for the strict and sole use and benefit of the

addressee and their legal advisor(s). It is not to be duplicated, disseminated or in

any other way replicated without the express consent in writing of Prendos New

Zealand Limited. This report has been produced in accordance with our letter of

engagement incorporating all terms and conditions stated therein.



3.0 Introduction

Instructions were received from Paul Muller of Tauranga City Council on 26th of

June 2019 to undertake a desktop review of the Prendos reports completed in 2015

as well as all other consultants’ reports, maintenance and repair records relating to

Blocks A, B and C, 91 Willow Street, Tauranga.

A visual internal and external inspection of the three blocks was carried out by

Sean Marshall and Mark Abrey on 25 and 26 July 2019. Externally, the blocks were

inspected from pavement level only. It rained heavily on both inspection days and

water penetration was readily evident.

Prendos carried out invasive building investigations and subsequent reports in

2015. These reports should be referred to in addition to this appraisal and are

included in Appendix K.

4.0 Defects Summary

The following is a traffic light summary of our principal observations. For a full

explanation please refer to the consultants reports in the appendices.

The traffic light colours have the following meanings:

Requiring immediate/urgent action cannot be deferred without

breaching statutory regulations, Health & Safety, acutely affecting

critical operations, functions or security, major reputational risks.

Medium term action, highly desirable to maintain the value and utility

of the property, possible serious cost implication if not remedied.

Moderate inconvenience or disruption, likely to have an effect on

occupant use.

No immediate concern, however further investigation or enquiry may

be required and may impact on future use and costs of maintaining the

building. Category may change depending on the results of the

investigation or if nothing is done to remedy the issue.



Element No Salient Defects Action

Fenestration

1.

Despite reactive ‘sealant’ maintenance over the years, the late

1980’s single glazed aluminium shop front joinery continues to

leak due to numerous deficiencies and has now reached /

exceeded its economic life. Prendos reported on this issue and

the consequence of it back in 2015. This resulted in level 1 to

building A and C being vacated in their entirety due to water

ingress and resulting mould growth to wall and floor finishes.

In addition the chloride aerosol and UV has damaged the dated

powder coated finishes and the neoprene glazing beads together

with the glued butt glass corners have deteriorated. On-going

reactive maintenance is probably not a cost effective option

anymore. The single 6mm glazed, non-thermally broken

aluminium joinery is very ineffective in terms of thermal

efficiency resulting in significant heat loss and the associated

energy costs. The late 1980’s joinery should be removed and

replaced with modern thermally efficient double glazed joinery

throughout

2.

The anodised 100mm seismic aluminium flush glazed joinery

units installed to level 2 in 2003 appear in good condition, albeit

they are inefficient from a thermal performance perspective.

The weak link is in the joinery / Aluminium composite panels

(ACP) wall cladding system and its reliance on silicon modified

sealant at joinery wall junctions to prevent water entry.

Properly applied MS sealant can have a life expectancy of

around 20 years. As such consideration should now be given to

replacing the joinery and ACP cladding sealant as this is starting

to break down and fail in areas having been exposed to the

elements for some 16 years.

Canopies

3.

The external steel glazed and rubber membrane lined canopies

over Willow Street and Wharf Street pavements are dilapidated.

The plywood substrate to the canopy ‘flat roof’ sections and

concealed structural steel were not visible. However we suspect

that there is water damage given the significant ponding water

and overflowing sumps, one of which was completely blocked.

The structural stability of the 30 degree sloping aluminium

glazed canopy is concerning. In areas, the 6mm laminated

glass panes have gravity slipped within the glazing bars. In

addition, the glazing bars have become detached from their

fixing into the main elevation. From a health and safety

perspective, make safe works are required now. The canopies

and associated water goods require complete strip back to

expose all structural steel elements followed by any required

steel remediation and new canopy design and rebuild.

4.

Sun shading louvres are installed over level 2 window joinery to

Willow Street and Wharf Street elevations. The 125mm x

50mm RHS steel louvre supports have been bolt fixed (visible to

the exterior) directly through the ACP cladding where it is then

fixed back to the concealed building structure. The junction of

the louvre support steel and ACP cladding is reliant on sealant

to prevent water entry. There are gaps in the sealant allowing

water entry which was evidenced by way of dye testing back in

2015. Puddle flanges have not been incorporated in the design

/ construction. The steel louvres should be removed, the fixing

methodology redesigned and then reinstated.




Roof

5.

Downpipes have been incorrectly installed and / or misplaced

(the 100mm pipe laid across the Chambers deck / roof is an

example) and others have become detached and separated all

resulting in stormwater pouring over vulnerable building

elements (and leaks into lower floors – refer 2015 Prendos

report).

6.

Sheet steel wall to roof apron flashings are undersized. This is

resulting in leaks, particularly of note into the NE corner of level

2 meeting room 1. The plywood roof substrate edge is visibly

wet and water damaged. Water was visibly leaking into meeting

room 1 at the time of our inspection.

7.

The structural steel to the roof installed HVAC platform over

building A is undersized. BECA letter report dated 17/9/18 note

that the incorrect steel beam weight has been used (25kg per

meter instead of the specified 45kg per meter). In addition, the

support structure should have comprised six pipe section posts

to transfer the loads back to the building structure. On site as-

built comprise four pipe section posts only. The application of

dead loads (assumed 150kg/m²) resulted in deflection of 40mm

to the centre of the 7.8m long steel beam despite redundant

HVAC units (previously serving vacated level 1) now being

removed. BECA note that there is a high probability that the

platform will not perform under earthquake shaking. They

recommend checking the pipe wall thickness is a minimum

89x5.5 G350 CHS, an intrusive investigation and a detailed

assessment of the platform structure and its supporting

members. As a temporary measure BECA recommend that

cross bracing be provided between the western posts.

8.

The extensive steel roof coverings (installed 2003) drain

stormwater to plywood constructed rubber membrane lined

concealed valley and parapet gutters. This form of guttering is

high risk and requires regular inspection and maintenance to

remain watertight. Some gutters are not laid to falls resulting in

full gutter length ponding water.

9.

The ACP parapet cappings are installed flat and are reliant on

joint sealant to prevent water entry into the sub-structure. The

joint sealant is failing in areas due to a combination of

installation methodology and general to be expected weathering

/ UV degradation.

10.

There is evidence of temporary ‘paint on’ waterproofing ‘repairs’

to roof fixings and roof flashings. Small plant is fixed directly

through the steel roof covering reliant on surface smeared

sealant. Proper long term repairs are recommended.

11.

Rubber boot flashings to air conditioning lines are reliant on

exposed sealant to prevent water entry. Lines to be installed

through proprietary goose neck pipe fittings are a long term

recommendation.

12. Cyclone washers have not been installed to large areas of the

steel roof coverings. These washers are recommended.

13.

The roof mounted photovoltaic solar panels serving the ‘solar

ready’ hot water cylinders appear dilapidated and non-

functioning. We recommend that these are checked to see if

they are working and if not either removed or replaced




14.

Ceramic deck tiling (off the Council Chambers) has been cast

directly into the ACP wall cladding and to insufficient falls

resulting in ponding water. The waterproofing beneath the tiles

is noted as being a ‘liquid applied’ membrane. These

membranes are prone to splitting through differential building /

material movement. Planned preventative maintenance should

include uplifting the ceramic tiles, substrate laid to proper falls

followed by installation of a new trafficable waterproofing

membrane.

15.

Water dams behind a number of roof penetrations; skylights,

HAVC support posts, pipes etc. Such penetrations through the

roof should be flashed back to the roof ridge or diverter flashing

installed.

Roof 16.

The BECA / Thermosash reports of 2015 note that the glazed

aluminium roof has not been designed nor installed to

accommodate the Ultimate Limit State (ULS) nor the Service

Limit State (SLS) differential seismic movement of the buildings,

that is, ±50mm and ±34mm respectively. Actual as-built site

observations note that the 8mm toughened glass panes are

expected to shatter as a result of differential building movement

amounting to less than ±14mm. Following this report, BECA

produced remedial glazing details in mid 2015, (Job Title –

Project Clean) and profiled polycarbonate ‘under roofs’ have

now been constructed in order to capture glass fragments in the

event of an earthquake).

External

Walls

17.

The ACP cladding to level 2 is a face sealed cladding system.

This means that weathertightness is wholly reliant on the

integrity of the modified silicon sealant used to fill the negative

joint at the cladding perimeter. No form of water drainage has

been allowed for. This is apposed to a pressure moderated ACP

cladding system that allows water to pass beyond the outer face

but then to drain back out without causing water damage to the

concealed building structure and fabric. Any water that leaks

past the face of a face sealed cladding system is trapped behind

the cladding and can result in concealed water damage. The

exposed ACP cladding sealant has been in service for some 16

years and is approaching if not at the end of its maximum

service life. In areas the sealant surface is split, de-bonded and

crazing due to a combination of incorrect joint construction, UV

radiation, general weathering and atmospheric conditions. The

ACP cladding is crudely finished in areas where it interfaces with

the original level 1 concrete structure. The flag pole support

brackets pass directly through the ACP cladding. The resultant

gap between materials has not been properly formed and is

unsealed. We recommend that all cladding joint sealant is

replaced and substrate checked for hidden damage especially in

high risk areas.

18.

Ground level walls to the library (north and west) are clad using

fibre cement sheets that are directly fixed to timber framing.

The external hard landscaping has been cast against the

absorbent cladding. Prendos invasive investigations carried out

in 2015 uncovered Stachybotrys growing on cellulose material

and advanced soft rot and white rot to concealed timber

framing. We recommend that all fibre cement sheet cladding is

removed together with all concealed water damaged materials

and a new properly designed and constructed cavity based

cladding system is installed.




19.

Whilst we do not know for sure, given the date of install, we

suspect that the ACP cladding comprises a non-fire rated

polyethylene core. Whilst the fire risk is considered low, given

recent high rise building fires associated with ACP cladding,

testing might be appropriate so as to make informed decisions

in relation to building usage, maintenance and insurance

matters.

20. There is steel corrosion where a structural steel beam interfaces

with the ACP cladding. The ACP cladding should be removed to

expose the steel beam so that it can be appropriately treated.

Internal

21.

Where inspected, we noted passive fire deficiencies to firewalls /

floors. Passive fire measures refer to fire stopping compliance

through fire rated walls and floors throughout the buildings. We

recommend that a full and thorough passive fire survey is

carried out. Often, the actual situation on site does not lend

itself to using ‘tested and approved solutions’ as is so often

stated as being required in a fire engineers report, as the actual

on site situation has never been envisaged and therefore has

not been previously tested and approved. This means that each

passive fire deficiency may have to be designed and shown to

be a solution that is as near as reasonably practical (an ANARP

solution) to a tested and approved solution. Through

experience, we note that carrying out retrospective passive fire

remediation in buildings such as these is problematic and costly.

That said, this investigation should be completed and remedial

works completed as soon as possible.

HVAC (ref.

HVAC Design

letter dated

30th July

2019)

22.

Building A

This building is serviced with a mixture of near new (2018) and

very old (1989) equipment. The old equipment is of an age

were parts are not available and the installed ozone depleting

refrigerant gas (R22) is no longer imported into New Zealand

making these units non repairable, not suitable to be re-

purposed and well passed their practical life expectancy. Level

1 was decanted in 2015 at which time the HVAC equipment

serving this floor was decommissioned. None of the level 1

equipment is suitable to be re-purposed. It is recommended

that all late 1980’s HVAC equipment to ground, first and second

floors is stripped out and replaced with modern equipment.

23.

Building C

As is the case with building A, this building is serviced with a

mixture of modern and very old (1989) equipment. The modern

equipment (to part ground level only) has a five year life

expectancy remaining. The remainder of the building is services

via old equipment that is of an age were parts are not available

and the installed ozone depleting refrigerant gas (R22) is no

longer imported into New Zealand making these units non

repairable, not suitable to be re-purposed and well passed their

practical life expectancy. Level 1 was decanted in 2015 at

which time the HVAC equipment serving this floor was

decommissioned. None of the level 1 equipment is suitable to

be re-purposed. It is recommended that all late 1980’s HVAC

equipment to ground, first and second floors is stripped out and

replaced with modern equipment




24.

Building B

The fresh air system is modern and is networked throughout the

building. A ten year life expectancy is viable. This building is

air conditioned via 13 year old Daikin VRV multi systems. This

equipment is suitable for purpose, reliable, well serviced and is

running well. That said, the Daikin VRV equipment is approx. 2

- 3 years away from its realistic life expectancy and is not

suitable to be repurposed based on its age. It is recommended

that a closer inspection of total running hours and a detailed

engineer’s inspection are carried out before deciding whether in

fact the equipment should be made redundant in the event that

TCC demolish the building.




Asbestos

(ref. ATL

Asbestos

Management

Plan)

25.

Building A, B and C

No asbestos containing materials (ACM) were identified to

accessible areas of the buildings during the ATL asbestos

management survey carried our mid 2018.

Note: The following areas were not surveyed as they were not

accessible or were excluded from the survey via ‘agreed

exclusions and caveats’. These areas are assumed to contain

asbestos until further investigations confirm the presence or

otherwise of ACM.

Building B – L1 – lift shaft

Building C – L2 – lift shaft

Electrical switchgear, fuse boxes, plant and associated

services

Operational plant and machinery including boilers /

calorifiers / lift machinery etc.

Access behind / above existing ACM’s

Intrusion through solid floor, ceiling slab or solid walls

requiring additional specialist support services

Below external ground level

Above fixed suspended ceilings

Solid wall cavities

Partition wall cavities

Beneath window sills

Behind skirting and door frames

Behind fixed wall cladding / coverings

Beneath or behind fixtures (e.g. bath panels, kitchen units)

Within fire doors

Beneath non-asbestos insulation to pipework, tanks boilers

etc.

Beneath fixed flooring materials (e.g. laminate flooring,

floor tiles etc.)

Beneath carpet or non-asbestos flooring

Floor voids

Behind non asbestos external soffits and fascia

Inaccessible or locked rooms to which there are no keys

available

Work at height where access equipment other than

standard surveyors ladders would be required

All areas found within the site boundaries

Lift shafts

Live plant

No making good

No asbestos sample labels

Should TCC decide to carry out any refurbishment, part or full

demolition of the buildings, then an asbestos demolition survey

must be carried out prior to the works. An asbestos

management plan is not sufficient for this purpose due to the

numerous areas (noted above) that have not been surveyed.




Security and

Access

Control (ref.

Eagle Eye

Engineering

/Aotea

Security

letter)

26.

Ground Floor

4x Smart LAN access modules

4x Smart PSU’s

1x 16v 40va transformer

1x battery

General rewire and tidy, bootlace multiple connections

27.

Ground floor - iSite

1x Integriti standard cabinet with tamper, keylock


2x Smart PSU’s


28.

First floor – iSite

1x Integriti standard cabinet with tamper, keylock

1x Smart PSU

1x Integriti LAN expander

1x UniBus input card

General rewire and tidy, bootlace multiple connections.

29.

First floor

Expander in riser

1x Integriti LAN expander

1x Smart PSU


2x Smart PSU’s

1 x 16v 40va transformer

1x battery


30.

Second floor

1 x Concept large cabinet with tamper, keylock


6x Smart PSU’s

1x 16v 40va transformer

General rewire and tidy, bootlace multiple connections.




Fire

Compliance

(Beca report

10/7/14)

31.

Beca’s fire compliance report was completed prior to the 2015

demolition of the administration building. Obviously, we have

ignored their proposed ‘required works’ that related to this

building. Some of their other proposed works relate to building

C and its interface with the old administration building. To date,

we understand through discussions with you that most of the

works that Beca proposed five years ago, have been put on hold

pending decisions around the future use of the buildings. Completing the sprinkler survey and repairs were carried out and managing the number of people on top floor of Civic A is in place.

Some of the proposed works, for example, passive fire works,

has not been completed. A summary of the Beca proposed fire

compliance works follows:

State of fire stopping compliance. Refer previous item 5.

Type 4 smoke detection is required in and around building C

stair and alterations to fire alarm system to comply with

NZS4512.

New escape route required on first floor between building A

and building B across the bridge link. Exit signage to be

provided. Reinstate building C and building B bridge links to

permit escape from / to. Failsafe override hardware to be

installed so that key not required to unlock doors.

Magnetic hold open devices to be fitted to the smoke –rated

glass double doors connecting building A and building C on

the 2nd floor. Smoke detector / door releases to be provided

on either side of the doors.

Smoke seals to be fitted to the doors onto the bridge link

connecting level 2 building B and building C.

Remove tower bolt from ground floor fire exit double doors to

building B.

32.

Update evacuation plans

Replace passive fire signage with internally illuminated signs

Review and upgrade all signage to fire and smoke doors to

comply with NZBS.

33.

In addition to a specific passive fire survey and report, we

recommend that a new fire compliance assessment survey and

report is completed and that all recommended works contained

therein are carried out as soon as possible.

34.

We understand that an emergency lighting audit has been

completed recently. We recommend that all recommended

upgrades contained therein are carried out.




Indoor Air

Quality (Air

Matters

report dated

18/6/19)

35.

Air Matters, air quality scientists and consultants, carried out

indoor air sampling comprising carbon monoxide, carbon

dioxide, temperature, humidity and microbes, throughout the

TCC Willow Street offices during April and May of this year.

The carbon dioxide ceiling limit was exceeded in the Nikau

Meeting room. It is recommended that TCC investigate the

adequacy of the ventilation system and / or look at

controlling the number of people in the meeting room.

Humidity levels were measured outside recommended

guidelines in the following areas; Kaimai room, library office,

customer center and flexi working area. It is recommended

that TCC’s HVAC engineers address this issue.

Temperature was measured outside recommended

guidelines in the following areas; customer centre, Nikau

meeting room, flexi working area, library offices and

executive reception. It is recommended that TCC’s HVAC

engineers address this issue.

No Stachybotrys spores were identified in any of the

samples collected. Furthermore microbial growth is low and

no health effects are expected. We note that level one to

building A and building C have been vacated since 2015 for

this very reason.

Electrical

Services

(Eagle Eye

Engineering

– Electrical

Audit dated

06/08/2019)

36.

Eagle Eye Engineering carried out an electrical audit on the TCC

Willow Street Offices to determine the current condition of the

electrical installations across the three Buildings. The salient

findings suggest that:

The installations varies in age across the buildings and in

general, the existing switchboards are in good condition but

require upgrading to become code compliant;

The main switchboard has reached its life expectancy and

requires replacement however, there are complications

associated with spacing in the existing switch room;

The cabling within the ceiling voids is entangled which

requires a complete overhaul;

There are evident signs of water damage in the ceilings and

the effects on the electrical installations are unknown;

There is a lack of dedicated cable support systems to

separate the differing installations;

Existing switchboards will need to be replaced in instances

where RCD protection cannot be accommodated;

In instances where the current installations are modified or

upgraded, these would need to be brought up to current

AS/NZS compliance standards;

Further testing is required to determine the integrity of the

current systems as well as extent of the work required, and

An indicative layout of proposed alterations would need to

be provided in order to determine how the system can be

fully upgraded and future proofed.




Lighting

Installation

(REXEL

lighting

Solutions /

Eagle Eye

Engineering

– Lighting

Audit dated

06/08/2019)

37.

Eagle Eye Engineering commissioned Rexel Lighting Solutions to

conduct a lighting audit on the TCC Willow Street Offices to

determine the current condition of the lighting installations

across the three Buildings. The salient findings suggest that:

The installations vary in age however, the majority of

luminaires which are original and 30 years old;

There are numerous instances where luminaires show signs

of water damage;

The original fluorescent luminaires are in average to poor

condition and have met their life expectancy which will

require ongoing maintenance with significant repair costs;

Rexel Lighting Solutions have provided recommendations for the

general upgrading of the current system in order to achieve a

system which is energy efficiency and relatively low

maintenance. In summary, the notable recommendations are as

follows:

The Emergency lighting requires upgrading. The Emergency

lighting systems are sporadic and noncompliant which will

require an independent fire report before designing final

recommendation;

A complete overhaul of the existing lighting system to new

LED luminaires is required in order to provide energy savings

and a reduction in maintenance costs, and

The LED systems will also improve the quality of lighting and

provide a more comfortable working environment with

improved unified glare ratio (UGR).



5.0 Conclusions and Recommendations

The TCC Blocks A, B &C continue to display, among numerous other things, issues

associated with weathertightness, and as a result, extensive remediation is

necessary both externally and internally. It is entirely possible to repurpose the

three blocks and bring them up to a code compliance standard. In order to

conclude wether this is a cost effective option, we would need to understand TCC’s

long term property strategy, given the site ownership, recent demolition of the

Administration Block and financial constraints.

We recommend that as a follow on stage, TCC procures a detailed and costed

feasibility study. The study should include high level remediation and new build

designs, in order to properly compare repurposing the existing buildings as

opposed to demolishing and building a new fit for purpose council building.

Yours faithfully

PRENDOS NEW ZEALAND LIMITED

Prepared by Prepared by

Sean Marshall BSc (Hons) MRICS CMInstD Chairman Chartered Building Surveyor

Mark Abrey MSc (Construction Management) Building Surveyor

Reviewed by

Dirk Stahlhut PhD Dipl Ing (FH) Wood Technology MNZIBS BOHS IP402 Registered Building Surveyor

Public Excluded Council Meeting Agenda 24 March 2020 12.1 ...

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