PALMERSTON NORTH CITY COUNCIL
Memorandum
TO: Community
Development Committee
MEETING DATE: 3
December 2018
TITLE: Review
of options for the administration of Hancock Community House
DATE: 16
November 2018
Presented By: Debbie
Duncan, General Manager - Community, Community
APPROVED BY: Heather
Shotter, Chief Executive
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RECOMMENDATION(S)
TO Council
1. That
the memorandum dated 1 December 2018 and titled
“Review of options for the administration of Hancock Community
House” be received.
2. That
Council instruct the Chief Executive to appoint the Palmerston North
Community Services Council (PNCSC) to provide the operational administration
at Hancock Community House (HCH).
3. That
Council instruct the Chief Executive to work with PNCSC to review the scope
of their current contract for the Provision of Services for the Hancock
Community House to include:
• All
day to day administration of HCH;
• Tenant
advocacy (the tenants voice) to PNCC;
• All
health & safety management excluding Landlord requirements within the
Lease Agreement;
• Provision
of a reception / information desk and navigating service for Tenants and
visitors into the building;
• Point
of contact for PNCC and the Tenants;
• Assessing
and implementing ongoing shared service opportunities which benefit the
tenants;
• Promote
and advertise HCH on behalf of the Tenant organisations.
4. That
Council approve the establishment of a $5,000 pa operational programme for
the purchase of furniture and equipment from within existing budgets.
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1. ISSUE
1.1 This memo provides an overview of the current and
recommended administration of Hancock House, with specific regard to the
following recommendations of the Community Development Committee on 1 October
and approved by Council on 24 October 2018:
· That the memorandum dated 5 September 2018 and titled “Review of
options for the administration of Hancock Community House” be received.
· That it be noted there will be a report back to the December 2018
Community Development Committee on the outcome/s of the review of
administration of Hancock Community House.
· That consultation with tenants of Hancock House about day to day
management of the facility is prioritised, and a recommendation of how issues
such as health and safety, security and maintenance, should be addressed, be
brought back to the December 2018 Community Development Meeting.
· That the current informal arrangements for the management of Hancock
Community House by PNCSC be formalised urgently.
2. BACKGROUND
Hancock Community House (HCH) was built and
opened in 2011 with financial support from PNCC and external fundraising
contributions totalling $2,210,000. The direction from PNCC was that the
facility should be cost neutral to the ratepayer for all Council contributions,
including the loan repayments on Council’s investment of $850,000 and the
provision of services by Council contractors such as cleaning, security and waste
management.
The objective of HCH was to strengthen and
improve the capacity and capability of the community sector by locating
community service providers within a community house.
In 2014, PNCC approved the option of an
independent Trust to administer the day to day running of this facility. This
option has not progressed due to the following challenges:
· Getting final agreement on the Trust Deed;
· Continued availability of nominated Trustees;
· Changes to legislation governing Trusts and other legislation such as
the Health & Safety Act 2015;
· Operational establishment and ongoing administration costs.
Many of these same challenges, regarding
establishing a Trust, remain.
3. Current
Situation
There are 14 Tenant organisations at
Hancock Community House. The type of tenant organisation is varied and provide,
in many cases, a holistic or wrap around service; “a one stop shop”
for the different needs of the community. Appendix 1 provides a summary of the
organisations located within HCH. Most social sector issues are covered by the
makeup of tenants at HCH, with exceptions currently Transport and Drugs &
Alcohol. Appendix 1 shows that many groups have areas of common interest and
can therefore work closely together, strengthening both the capacity and capability
of the organisations.
In
collaboration with Palmerston North Community Services Council (PNCSC), a
contract for the Provision of Services for the Hancock Community House
for the period 1st October 2018 (to formalise the earlier informal
practices) to 31 December 2018 has been agreed and finalised. At the time
of writing this memo agreement covers:
· The management of bookings and related administration of meeting rooms
· Coordinating the reporting of maintenance issues
· Coordinating tenant groups meeting
· Day to day engagement with external
contractors/service providers and visitors.
However,
staff are currently working with PNCSC to amend and extend this agreement to
capture responsibilities for Health and Safety. This will soon be completed and
a detailed update on this will be provided to Committee at presentation of this
memo.
For the last three years HCH has not been
cost neutral to the ratepayer. Table 1 below shows that HCH is currently not
the situation, with the last financial year HCH having a rating impact of
$43,575. As the facility ages, the maintenance requirements and associated
costs will increase, resulting in a further rating impact.
Table 1 Financial
Impact to the Ratepayer from HCH
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2015/16
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2016/17
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2017/18
|
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Revenue
|
|
|
|
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Rents
& Leases
|
97,199
|
97,636
|
99,005
|
|
Miscellaneous
(HCH Meeting Room Charges)
|
16,304
|
17,605
|
16,985
|
|
Total
Revenue -
|
113,503
|
115,581
|
116,603
|
|
Expenditure
|
|
|
|
|
Asset
management
|
12,450
|
6,708
|
6,762
|
|
Maintenance & Cleaning
|
45,960
|
43,670
|
51,757
|
|
Utilities
|
21,947
|
23,285
|
20,694
|
|
Interest
on Loan
|
48,026
|
40,028
|
34,428
|
|
Loan
principal repayment
|
29,851
|
31,552
|
33,351
|
|
Hancock
house administration
|
13,500
|
14,250
|
10,500
|
|
Security
|
1,990
|
2,517
|
1,783
|
|
Miscellaneous
costs
|
870
|
1,221
|
903
|
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Total
Expenditure
|
174,594
|
$163,231
|
$160,178
|
|
|
|
|
|
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Total
operating rating impact (Cost to Ratepayer)
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(61,090)
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($47,650)
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(43,575)
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Current meeting room charges range from $66 per day
for tenants using small rooms to $190 per day for non-community sector use of
larger meeting rooms. The rentals haven’t been reviewed for some years.
4. review
– Phase One
4.1 Tenant
Engagement
Tenants were engaged with
throughout the Review. The Tenant engagement consisted of three parts:
1. Tenant
thermometer survey;
2. Workshop
reviews to identify what is and is not working with the current delivery model;
and
3. Review
and discussion of possible options.
Many Tenants acknowledged the privilege to be a tenant
at Hancock Community House; that it is a great facility and that Palmerston
North community and the tenant organisations are lucky to have it. They also
wanted to acknowledge and thank PNCC for:
· Council's recent change to the carparking - 1st hour
free; and
· The engagement process undertaken and the opportunity
to input into the review of the administration of Hancock Community House. It
is appreciated, and they hope this level of engagement will continue.
4.2 Tenant
Thermometer Survey
This
was a short survey to gauge how the Tenants were feeling about the
administration of HCH. It was answered by 14 people which represented 12 of the
14 Tenant organisations of HCH.
A summary of the results
is as follows:
· All respondents agreed that HCH benefited their
organisation.
· All respondents agreed (43% strongly agreed) that
there are more opportunities to support the capacity and capability of their
organisation to better meet the needs of their client groups.
· Most respondents (82%) thought that the building is
fit for purpose and allows their organisation to support the community
effectively. Two of the 12 organisations disagreed that the building is fit for
purpose.
· The majority (86%) of respondents agreed that the
operation and management of HCH has allowed their organisation to support the
community effectively. Two people disagreed.
· Regarding the current operation and management of
Hancock Community House:
o 21% (3 people) of respondents felt that they
didn’t think the current operation and management of Hancock Community
House needed to change.
o The majority, 57% (8 people) of respondents felt that
only minor tweaks to the current operation and management model was required.
o Two respondents thought significant changes to the
current operation and management model was required.
o One respondent though that a completely new operation
and management model was required to improve the support the Tenants can offer
their client groups.
The
above results provide a good understanding of the extent of change required to
better meet the needs of the Tenants; with most identifying only minor tweaks
(not wholesale changes) are required to the current administration and
management model.
Engagement
steps 2 and 3 with the tenant organisations provided an opportunity to further
understand the issues identified above.
4.3 Workshop Review
The tenants identified eight areas of
improvement which relate to the management and administration of HCH:
1. Room
booking
2. Financial
transparency
3. Administration
4. Building
issues
5. Carparking
6. Promotion
– Advertising & Marketing
7. Health
& Safety
8. Shared
services
These are described in more detail in
Appendix 2 and include a summary of the tenant feedback and HCH administration
considerations. Five themes were identified within the areas of improvement
which could be addressed through a modified administration delivery model:
Theme 1:
Service Level Improvements including policies, roles & responsibilities
It
became apparent that the roles and responsibilities between PNCC and Palmerston
North Community Services Council were either not clear or not understood by the
Tenants or there was confusion about different aspects of HCH operation. This
has resulted in:
· Time consuming and frustration for some Tenants to
find out information or action things. Examples of this include:
o Some Tenants being advised that PNCC were unable to
provide financial statements.
o PNCC staff not returning calls or requests not
followed up with.
o Or simply told the information was not available.
· Tenants seeking information through
policies and procedures and finding that either they don’t exist, or they
are out of date. Examples of this include:
o Tenants unsure of who is responsible for health &
safety of external organisations utilising the meeting rooms including the
kitchens for catering.
o The purpose of meeting rooms including and who should
be using them. For example, a decision was made collectively by Tenants that a
koha should be provided by commercial organisations utilising the interview
rooms (the original intention was they were to be provided for free for
community groups).
o Security of the building in the evenings and who is
responsible to check if all people and/or organisations have left the building.
This theme could be resolved through:
· Appointing appropriate organisations
to manage the tasks effectively and identifying roles responsible.
· Identifying a single point of contact
at PNCC.
· Clearly defining and communicating
roles and responsibilities to all Tenants and stakeholders.
· Providing an information
desk/reception area providing a navigating service for both Tenants and
incoming visitors to HCH.
· Onsite facilitation, management and
engagement with Tenants to support their daily operations.
· Updating information including (but not limited to):
o Health and safety risk register – which would
include the procedures and protocols, responsibilities and mitigating actions
in relation to external organisations booking the meetings rooms.
o A room booking policy to be developed for both the
meeting rooms and interview rooms. This policy document should also record the
room’s purpose and who can book them. The purpose of the interview rooms
should be reviewed along with an assessment of the types of organisations that
have been paying a koha to utilise the interview rooms.
o Operational manual including all facility procedures.
Theme
2: Funding Constraints & Building Fit for Purpose
A frustration for many
tenants is that the communal areas could be improved. The improvements could
result in higher utilisation of the meeting rooms and an improved experience
for the Tenants, the public and organisations booking the meeting rooms. As the
communal areas are not managed or maintained by any one Tenant or organisation,
there is no mechanism to fund these improvements currently and PNCC has not had
an operational budget for these improvements. Examples of these improvements
which require funding include:
· Maintenance or replacement of communal items e.g.
chairs and tables. Some items have been donated, others are owned by
individual tenants. There is no budget or mechanism to fund these items for HCH
to replace, maintain or purchase new or additional items.
· Internal way finding - advice is needed on improving
the visitor experience and accessibility for the different Tenants.
· Kitchen – The kitchen is not fit for purpose for
either shared tenant use or catering requirements for organisations utilising
the meeting rooms.
· Outdoor space – A sun sail in the outdoor space
could provide an extra meeting or Tenant space during the summer months and
additionally could provide a cost-effective solution in reducing the solar gain
in the large meeting room downstairs.
· Sound proofing of walls – Tenants and client
groups can be overheard in the meeting rooms during sensitive conversations.
Many of the above
issues could be easily resolved through either:
· The provision of an operational budget for HCH; or
· Redirecting revenues (full or part) from external
meeting room bookings, which is currently credited back to Tenants; or
· The establishment of a Trust which could apply for
grant funding.
Theme
3: Advocacy & Support
It became apparent through
the discussion of issues and areas for improvement during Tenant engagement
that:
· PNCC holds tenant meetings at HCH. The purpose of
these meetings is to resolve operational issues however it is dependent on
Tenants turning up to these meetings. There are still many issues that remain
unresolved;
· The Tenants require advocacy and support on issues
they feel strongly about, for example car parking.
· There are opportunities to improve shared services
amongst Tenants, however there is not any one organisation to progress this for
them.
This theme could be resolved through one
organisation or person responsible for:
· Advocating and communicating to PNCC on the Tenants
behalf;
· Continuing to and increasing the amount of
collaboration between tenant organisations;
· Progressing opportunities for shared services and cost
savings;
· Promotion & advertising on behalf of Tenants for
HCH; and
· Applying for grant funding where appropriate.
Theme 4: Capacity & Capability Building
An objective of this review
was to understand the opportunities to support the capacity and capability of
the community groups to enable them to better meet the needs of their client
groups. During stakeholder engagement the benefits of HCH to the Tenants and
their clients were discussed, comments have been recorded and provided within
Appendix 3.
The theme that became
apparent, through the Tenant engagement process, was that there is
collaboration between Tenants to build capacity and capability. Tenants see
that it is HCH that has enabled this for their organisation. This can be seen
through:
· Tenants commenting that HCH provides an opportunity to
talk to others for support, especially for those that are from small
organisations;
· Strong networking between organisations and sharing of
information; and
· Tenant organisations referring clients to other
organisations within HCH or Tenants working collaboratively with clients.
The administration
delivery model needs to respond to the needs of the community sector to
continue and further build capacity and capability through understanding,
support, advocacy and leadership.
4.4 Case for Change
The themes
discussed in the previous section have identified current challenges with
status quo. The themes raised
through engagement, both with Tenants and PNCC, have been translated into
Change Objectives, listed in Table 2 below.
Table 2 Change
Objectives
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Change
Objectives
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Description
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Change
Objective 1 - Service Level Improvements
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The
administration model will enable the most appropriate organisation to manage
specific tasks effectively. Roles and responsibilities will be clear and
communicated to all stakeholders.
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Change
Objective 2 - Funding Constraints
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The
administration model will enable the building to better meet the needs of the
tenants, clients and visitors (investment in the communal areas); and provide
the most effective means for funding these improvements.
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Change
Objective 3 – Advocacy & Support
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The
administration model will enable the Tenants to have the support they require
to increase their capacity and capability and to advocate on their behalf.
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Change
Objective 4 – Build Capacity & Capability
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The
administration model needs to respond to the needs of the community sector to
continue and further build capacity and capability through understanding,
support, advocacy and leadership.
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4.5 Critical Success Factors
For a change to occur the Tenants
identified the following critical success factors, which must be met, summarised
in Table 3.
Table 3
Critical Success Factors
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Critical
Success Factors
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Affordability
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Rents
remain low and affordable for the Tenants. The option to implement must be
affordable to PNCC and the rate payer.
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Strategic
Fit & Business Needs
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The
administration option must be strategically aligned to Connected
Communities - increasing capacity and capability in the community sector.
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Cost
effectiveness against benefits
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There
must be an optimal mix of benefits, costs and risks.
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Supplier capacity
and capability
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There
are resources (capacity or capability) to either establish, deliver or supply
the administration option.
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5. review
– Phase Two
The purpose of Phase 2 was to identify the
preferred administration model from the perspective of the Tenants, using the
agreed Change Objectives and Critical Success Factors. Phase 2 included
discussions and debate with the Tenants regarding the advantages and
disadvantages of each of the possible administration options.
5.1 Administration
Model Options
There are five
options for both Tenants and PNCC to consider. These have been identified as:
1. Option
A – Status Quo.
2. Option
B – Council Administration.
3. Option
C – Community Sector Administration.
4. Option
D – Commercial Delivery Model.
5. Option
E – Trust Model.
A high-level
description of each option is provided in Appendix 3, and a summary of the
assessment of each option is provided within Appendix 4.
5.2 Impact on the ratepayer –
efficiency modelling
It is important to understand the impact on
the ratepayer for both options. Hancock Community House was intended to be cost
neutral to the rate payer. As stated in the Palmerston North Community
House, A Feasibility Study, dated July 2008 “The Council will also
need an assurance that the Community House, while receiving significant
reduction in costs such as rent and rates, will not have an expectation of
ongoing financial support from Council and ratepayers.” Table 1 on page 4
shows this is not the case and that HCH is not currently (and has never been)
cost neutral to the ratepayer.
The last financial year HCH had a rating
impact of $43,575. If PNCC requires HCH to be cost neutral to the ratepayer,
there are two options to consider:
· Move towards a commercial rent model for the Tenants.
This goes against the original intention of HCH and doesn’t align with
Council’s Connected Community Strategy.
· Redirect the external meeting room revenue to offset
the operational cost of the building rather than crediting the Tenants HCH
charges. The external meeting room revenue would not be sufficient to remove
the rating impact. Additionally, this change could potentially result in
decreased promotion, by the Tenants, of the meeting rooms where it is perceived
as benefiting PNCC not the Tenants directly.
Alternatively, PNCC could acknowledge that
HCH does have a rating impact and whichever administration option is chosen, it
should minimise the additional impact to the ratepayer while maximising the
benefits to the community. This is most likely to be achieved through options C
or E.
The additional costs, advantages and
disadvantages for each of these options are summarised in Table 4 below.
Table 4
Further analysis of Options C & E
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Costs
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Option C:
Community Sector Administration
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Option E:
Trust Model
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Establishment Costs
(One Off Costs)
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- Legal
fees for the Service Agreement $5k
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- Legal
Fees to establish and finalise the Trust Deed $5k – $10k
- Resource
time to identify & interview potential Trustees
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PNCC HCH Operational Costs
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- PNCC
HCH Operational Budget for Communal Items (max $10k pa)
-
Administration Fees depending on scope (approximately $50k)
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- PNCC
HCH Operational Budget for Communal Items (max $10k pa)
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PNCC Grants
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- HCH
Administration (approximately $50k)
- Trust
Audit Fees ($5k- $10k)
- Filing
annual returns
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Total Impact to Rate Payer
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One off
impact $5k
Annual
Rating Impact Increase approximately $60k
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One off impact $5k-10k
Annual Rating Impact Increase $65k
minimum
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Option C:
Community Sector Administration
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Option E:
Trust Model
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Disadvantages
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- The
Agreement would be time bound in line with Council’s Strategic Priority
Grants, thereby not necessarily providing the Tenants with long term
stability.
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- Difficult
to find Trustees with skills and expertise. A Trust is only as good as its
Trustees.
- PNCC
would have a limited level of influence over the operations of the Trust.
- Additional
costs would be required to manage and operate a Trust.
- Uncertainty
of ongoing fundraising
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Advantages
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- If the
organisation was a Tenant at HCH there may be opportunities to create
efficiencies with existing resource at HCH thereby decreasing the rating
impact.
- PNCC
has greater influence over the operations of HCH by having a service level
agreement and further accountability through the Strategic Grant process with
the Community Sector organisation.
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- Sole
purpose/focus is the HCH Administration.
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Option C is likely to be more cost
effective and result in less administration from a PNCC perspective. Both
options deliver a similar level of benefit to the Tenant organisations, however
there are significantly more disadvantages in establishing a Trust.
6. NEXT
STEPS
PNSCS’s
mission states that they will take a lead role in facilitating the
empowerment of community groups to participate in and contribute to the
community and its wellbeing. With this view of providing leadership and
support to community groups; and being an anchor tenant in the entry area of
Hancock House, PNCSC is well placed to provide the co-ordinated administration
of the facility – and have expressed interest in being considered for
this role.
It
is therefore recommended that Council proceed with Option C – to
appoint PNSCS to deliver the administration at HCH. The scope of their current
contract for the Provision
of Services for the Hancock Community House would be expanded to include:
· All day to day administration of HCH;
· Tenant advocacy (the tenants voice) to PNCC;
· All health & safety management, excluding Landlord
requirements within the Lease Agreement;
· Provision of a reception/information and navigational
service for Tenants and visitors into the building;
· Point of contact for PNCC and the Tenants;
· Assessment and implementation of ongoing shared
service opportunities which benefit the tenants; and
· Promote and advertise HCH on behalf of the Tenant
organisations.
The contract would also be extended to 30 June 2019,
with consideration of funding beyond this to be progressed through the new
Strategic Priority Grant process currently underway. The cost of the contract
extension can be met through existing Fees for Service budget. Responsibility
to support PNCSC to develop and implement the new administration model will be
provided through a single point of contact within the Community Unit.
In addition to the above,
it is recommended that Council approve the provision of a $5,000 operational
programme from within existing budgets. The purpose of this programme would be
to replace, maintain and purchase communal items for HCH for the benefit of all
users.
Expenditure of this budget would be managed by the Community Development
Manager in collaboration with PNCSC to ensure Council’s procurement
processes are followed, Council purchasing benefits are maximised and creative
community opportunities to support the facility are realised.
Compliance and administration
|
Does the Committee have
delegated authority to decide?
If Yes quote relevant clause(s)
from Delegations Manual <Enter
clause>
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No
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Are the decisions significant?
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No
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If they are significant do they
affect land or a body of water?
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No
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Can this decision only be made
through a 10 Year Plan?
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No
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Does this decision require
consultation through the Special Consultative procedure?
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No
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Is there funding in the current
Annual Plan for these actions?
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Yes
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Are the recommendations
inconsistent with any of Council’s policies or plans?
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No
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The recommendations contribute
to Goal 3: A Connected and Safe Community
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The recommendations contribute
to the outcomes of the Connected Community Strategy
|
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The recommendations contribute
to the achievement of action/actions in
The action is: Work closely with
contracted organisations to achieve Council outcomes and identify other
opportunities for the organisation and across the sector.
|
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Contribution to strategic
direction
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Directly supports Priority 3
of the Connected Community Strategy to build community capacity to take
ownership and encourage community leadership of solutions, including better
co-ordination between community organisations and groups.
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Attachments
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1.
|
Appendix 1 Types of Tenants at HCH ⇩ 
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2.
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Appendix 2 Tenant Engagement ⇩
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3.
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Appendix 3 Benefits ⇩ 
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4.
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Appendix 4 Administration Options ⇩
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5.
|
Appendix 5 Assessment of Options ⇩
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