4 July 2019




Order Paper for Council meeting to be held in the

Council Chambers, 2nd Floor, 30 Laings Road, Lower Hutt,







Tuesday 9 July 2019 commencing at 3.00pm










Mayor W R Wallace (Chair)

Deputy Mayor D Bassett

Cr G Barratt

Cr C Barry

Cr L Bridson

Cr J Briggs

Cr M Cousins

Cr S Edwards

Cr T Lewis

Cr M Lulich

Cr G McDonald

Cr C Milne

Cr L Sutton









For the dates and times of Council Meetings please visit









Meeting Cycle:

Council meets on a six weekly basis (Extraordinary Meetings can be called following a resolution of Council; or on the requisition of the Chair or one third of the total membership of Council)

Power to (being a power that is not capable of being delegated)[1]:

     Make a rate.

     Make bylaws.

     Borrow money other than in accordance with the Long Term Plan (LTP).

     Purchase or dispose of assets other than in accordance with the LTP.

     Purchase or dispose of Council land and property other than in accordance with the LTP.

     Adopt the LTP, Annual Plan and Annual Report.

     Adopt policies required to be adopted and consulted on under the Act in association with the LTP or developed for the purpose of the Local Governance Statement.

     Appoint the Chief Executive.

     Exercise any powers and duties conferred or imposed on the local authority by the Public Works Act 1981 or the Resource Management Act 1991 that are unable to be delegated.

     Undertake all other actions which are by law not capable of being delegated.

     The power to adopt a Remuneration and Employment Policy.

Decide on:

Policy issues

     Adoption of all policy required by legislation.

     Adoption of policies with a city-wide or strategic focus.

District Plan

     Promotion of Plan Changes and Variations recommended by the City Development Committee prior to public notification.

     The withdrawal of Plan Changes in accordance with clause 8D, Part 1, Schedule 1 of the Resource Management Act 1991.

     Approval, to make operative, of District Plan and Plan Changes (in accordance with clause 17, Part 1, Schedule 1 of the Resource Management Act 1991).

Representation, electoral and governance matters

     The method of voting for the Triennial elections.

     Representation reviews.

     Council’s Code of Conduct and Local Governance Statement.

     Elected Members Remuneration.

     The outcome of any extraordinary vacancies on Council.

     Any other matters for which a local authority decision is required under the Local Electoral Act 2001.

     All matters identified in these Terms of Reference as delegated to Council Committees (or otherwise delegated by the Council) and oversee those delegations.

     Council‘s delegations to officers and community boards.

Delegations and employment of the Chief Executive

     The review and negotiation of the contract, performance agreement and remuneration of the Chief Executive.

Meetings and committees

     Standing Orders for Council and its committees.

     Council’s annual meeting schedule.

Operational matters

     The establishment and disposal of any Council Controlled Organisation or Council Controlled Trading Organisation and approval of annual Statements of Corporate Intent on the recommendation of the Finance and Performance Committee.

     Civil Defence Emergency Management Group matters requiring Council’s input.

     Road closing and road stopping matters.

     All other matters for which final authority is not delegated.


     The non-elected members of the Standing Committees (including extraordinary vacancies of non-elected representatives).

     The Directors of Council Controlled Organisations and Council Controlled Trading Organisations. 

     Council’s nominee on any Trust.

     Council representatives on any outside organisations (where applicable and time permits, recommendations for the appointment may be sought from the appropriate standing committee and/or outside organisations).

     The Chief Executive of Hutt City Council.

     Council’s Electoral Officer, Principal Rural Fire Officer and any other appointments required by statute.





Ordinary meeting to be held in the Council Chambers, 2nd Floor, 30 Laings Road, Lower Hutt on

 Tuesday 9 July 2019 commencing at 3.00pm.




Public Business


1.       APOLOGIES 


Generally up to 30 minutes is set aside for public comment (three minutes per speaker on items appearing on the agenda). Speakers may be asked questions on the matters they raise.      


4.       Naenae Pool - Initial Information on Options for Community Feedback (19/811)

Report No. HCC2019/3/139 by the Divisional Manager Community Hubs     6

Mayor’s Recommendation:

“That Council discusses and makes final recommendations after discussion.“


5.       QUESTIONS

With reference to section 32 of Standing Orders, before putting a question a member shall endeavour to obtain the information. Questions shall be concise and in writing and handed to the Chair prior to the commencement of the meeting.   








Donna Male

Acting Divisional Manager, Democratic Services


                                                                                      13                                                             09 July 2019

Hutt City Council

19 June 2019




File: (19/811)





Report no: HCC2019/3/139


Naenae Pool - Initial Information on Options for Community Feedback 


Purpose of Report

1.    The purpose of this report is to provide Council with relevant information on possible project options in relation to the Naenae Pool and Naenae Community Hub, including how these project options might be funded.  This information is to inform what options Council consults with the community on in the coming months.


That Council:

(i)    notes and receives the contents of the report;

(ii)   agrees that officers undertake pre-consultation in the July – September 2019 period with the community on project and funding options;

(iii)  considers which of the following project options, if not all, to consult with the community on:

(a)   new integrated pool and community hub;

(b)   refurbishment of pool and separate new community hub (as previously designed);

(c)   new pool only;

(d)   refurbishment of pool only; or

(e)   do nothing;

(iv) considers which of the following funding options, if not all, to consult with the community on:

(a)   rates increase together with debt funding;

(b)   removing or deferring projects already in the Long Term Plan;

(c)   asset sales;

(d)   reducing Council services; or

(e)   combination of the above;

(v)  agrees that the incoming Council reviews the results of consultation and makes a decision on the future of this project in November 2019; and

(vi) notes that this decision is likely to require a Long Term Plan amendment process early in 2020.


Executive Summary

2.    This report provides Council with high level project options, rough orders of cost and possible funding options to address the closure of the Naenae Pool. 

3.    The information is provided to inform Council decision making on what it will seek feedback on from the community.  Council is not required or able at this stage to agree a final option and how it will be funded.  We need to hear from the community. We want:

Ø the community to share their views and be heard;

Ø to know which option people prefer, and why; so we can understand and so that we pick up any new or different thinking that might add value; and

Ø to know how people think we should pay for it, if a refurbishment or rebuild option is preferred.

4.    The project options Council has to consider are:

·      New integrated Pool and Community Hub ($66M)

·      Refurbished Pool and separate new Community Hub ($39M)

·      New Pool only ($52M)

·      Refurbished Pool only ($30M)

·      Do nothing.

5.   The integrated Pool and Community Hub is aligned to current Council strategies and intent – Leisure and Wellbeing, Integrated Community Facilities. 

6.    The funding options available to Council are:

·      Rates increase together with debt funding

·      Remove or defer existing capital projects in the Long Term Plan (LTP)

·      Sale of Council Assets

·      Reduced Council services

·      A combination of all or some of the above.

7.   The report notes that a number of the funding options may be unpalatable from a community perspective. Officers are of the view that a rates increase together with debt funding, is the preferable funding option as it does not impact significantly on existing Council plans and services.

8.    Council is able to seek feedback and or consult on all options or some. Council needs to give serious consideration to this, particularly with regard to funding options.


9.    In December 2018, following receipt of an engineering assessment of the Naenae Learners Pool building, a decision was made to close this part of the facility to the public due to some building elements in this area rating less than 34% New Building Standard or NBS.

10.  Since this time engineers have continued to assess other structural elements of the remainder of the facility.

11.  On 10 April 2019, officers received a written report on the main pool advising the results of the partial seismic assessment for the main pool hall and grandstand. This report indicated an overall rating of less than 34%NBS. This area houses the main pool, fitness suite, meetings rooms and offices. Some major components of the building structure were reported to be below 20%.

12.  At a workshop held on 10 April 2019, officers informed the Mayor and Councillors of the contents of the report. They were unanimous in their support of the officers’ decision to close the pool.

13.  The decision to close the pool was made after considering a number of factors, with safety of the public and staff the number one priority.

14.  Peer review verification of the seismic report has been completed by independent consultants and confirms the building is below 34% NBS.

15.  Since closure, officers have been working to provide Councillors with information about potential future options for this facility, the Naenae Community Hub, and the Naenae Community Hall.

16.  Officers engaged consultants to progress a remediation proposal and rough order of costs for the facility. This is discussed below.

17.  Officers also engaged consultants to complete high level concepts and rough order of costs for a new aquatic facility as well as an integrated aquatic facility with a community hub. This is discussed below.

18.  Several weeks ago as part of the Annual Plan process Council agreed to the following financial changes:

·      capital timing changes – $9M for Pool in 2019/20, Community Hub $8.1M in 2020/21;

·      reduction of net operating costs for Naenae Pool by $0.5M with $0.3M reallocated to other Aquatic Services;

·      supporting Naenae CBD activation $200k over two years;

·      special consultation and LTP amendment costs $100k; and

·      Naenae community activities and events $100k over two years.


New Build Options (see images further in report)

19.  The high level concept discussed in this section is an example of one possible option for progressing new swimming pool and community hub facilities in Naenae. It has been commissioned to enable rough order costs to be developed for Council consideration.

20.  Consultants were tasked with developing a high level concept design for an integrated pool and community hub which incorporated swimming pool services, library, community meeting spaces, a recreation and performance hall and a community gym in a single building.

21.  A new integrated pool/hub option provides a significant increase in the level of service provided to the community, with fit for purpose facilities designed in an optimal way for flexibility of use, ensuring full accessibility and providing synergy between hub and pool based activities. It reduces duplication and can leverage economies of scale in construction.

22.  The concept developed includes minimum functional requirements to deliver a fit for purpose facility and is anticipated to have a lifespan of >75 years.

23.  The integrated design retains all previous elements from the community hub project. 

24.  When developing the pool design consultants were asked to consider:

·    the swimming and recreational needs of the local community;

·    the needs of local aquatic clubs and the facilities fit within the regional pools network; and

·    recreational activities for children 10-14 years.

25.  Key aspects of the new pool concept include: a 50m main pool, a warm water adults pool, waterslide, diving board, and a large children’s and toddlers’ pool with outlets to allow the addition of a range of waterplay features.

26.  The 50m pool has been designed with a moveable bulkhead and moveable floor over part of the pool. This allows three independent zones to be provided for multiple activities to occur simultaneously; like swimming lessons, club bookings and public swimming.

27.  This flexibility in design significantly increases the level of service to the public from previous provision and would allow greater public use of the pool when aquatic sport activities are taking place.

28.  Naenae Pool’s place in the regional network of pool facilities is primarily as an aquatic sport pool. The new pool option as designed has the ability to meet the majority of required standards for national level aquatic sports.

29.  The design also includes all required ancillary spaces such as control rooms, change facilities, pool shop and a gym facility on level one.

30.  At this stage a new build has not included a café due to the proximity of Hillary Court.

31.  Energy efficient electric water heat pumps have been included in line with Council’s 2050 zero carbon target.

32.  This new design will be at 100% NBS IL3 and take two to three years to complete from project initiation.

33.  For costing purposes consultants have provided delineation between the pool/gym facility and the community hub/library in the design allowing for costings to be developed for separate and combined facilities.

34.  Council has previously been presented with information on a stand-alone community hub.

Refurbishment Option (see images further in report)

35.  A refurbishment brings the pool facility up to 67% NBS at IL3.

36.  This option addresses key structural issues identified in the detailed seismic assessment in addition to: replacing the roof; updating plant; completing necessary isolated remedial leak work on the pool tank; and accessibility and fire systems improvements required to meet code.

37.  It should be noted that this does not make the facility wholly fit for purpose as it will still not meet a number of aquatic sport requirements, some accessibility constraints will still exist and the layout of the design is sub-optimal. No service level improvements will occur for the community in this option.

38.  This option will take two to three years to complete from project initiation and have a significant time creep risk due to the type and complexity of work required.

39.  The lifespan of a refurbished facility is hard to estimate. New parts of the building would be expected to have 50 years of life, however there are a large number of original items retained such as pool tank, glulam structural beams etc, that will require ongoing maintenance and budgets.

40.  Officers have priced in a change from gas boilers to electrical heating for a refurbishment in line with Council’s 2050 zero carbon targets.

Do Nothing Option

41.  A ‘do nothing’ option is not recommended by officers, however this is still an option available to Council. This would still incur costs of demolition and asbestos removal of the unsafe facility/facilities.

42.  The land could be kept as reserve, or repurposed for other uses. It is currently classified as recreation reserve. This would leave a very significant gap in Hutt City’s, and the wider regions, aquatic services. It would likely pose further challenges to the retail precinct also. 

Additional Information

Alignment to Council Strategy and Direction

43.  Officers are of the view that an Integrated Pool and Hub option is the most strategically aligned to existing Council strategies and intent.  

44.  An important contributor to achieving Council’s strategic intent, as outlined in the Leisure and Wellbeing Strategy, is ensuring that our suburban centres and neighbourhoods are provided with world-class, fit-for-purpose community facilities.

45.  Integration and rationalisation are the two main principles behind the Integrated Community Facilities Plan.

46.  By combining facilities into hubs, Council can update and modernise its facilities more efficiently and at less cost, as well as broaden the range, and increase the standard, of services. They will provide multiple facilities at an appropriate level for the needs and size of the communities they serve.

47.  These hub developments are important to our existing community, but will also help provide the kinds of facilities communities, whanau and individuals increasingly desire and expect in their community. Consequently, they are seen as crucial to rejuvenating the city and making it more attractive to prospective new home owners and developers.

48.  Such hubs will be an exciting feature of our city in the future, contributing to Lower Hutt as being a great place to live, work and play.


49.  Neither the pool, library or hall are listed as heritage buildings in the District Plan or by Heritage New Zealand.

50.  Officers are aware that some individuals and groups place heritage value on the pool façade particularly.

51.  Naturally there is a tension between heritage retention, financial constraints and creating the most fit for purpose community facilities. Our view is that the priority should be on providing the best functional building for community use within the fiscal constraints Council identifies.

52.  In a refurbishment option the existing façade of the pool will be retained and while changes will be required to windows and in-fill walls, officers believe that this will not detract from the current aesthetic. 

53.  At this stage a new build option has not considered retention of the façade due to how the build would fit on the available space of the pool and community hall area.

54.  The new build concept presented, features two key elements. Firstly, the extension of the pedestrian mall from Hilary Court across Everest Avenue and right through the new facility. The designers have embraced this idea and created a heart, or spine, for the facility that mirrors the mall, giving a nod to the importance of Hillary Court as the first pedestrian mall in New Zealand.

55.  Secondly, pre-European history is celebrated by the jagged front edge of the facility and skylights. A key local legend is that of two Taniwha who through ‘rupture’ created the streams Te Awamutu and Waiwhetu. An extract of the design inspiration is included as Appendix 1 to this report.

Construction Sector and Procurement Options

56.  Appendix 2 to this report provides a view of the current construction market and procurement options. Procurement methodology will be informed by the final option approved. Through consultation, officers will continue to explore all procurement options, including seeking expert advice.

Naenae Pool Significance in Aquatic Network

57.  The Naenae Pool opened in 1956 to service the rapidly growing urban areas of Naenae, Epuni and Taita. The main pool was converted to a covered indoor pool in 1987 and a covered learners pool was added in 1998. The pool was built to the then Olympic Swimming Pool Standards and hosted many national and international events.

58.  The pool plays an important role for aquatic sport codes in the Hutt Valley and is currently the home to Naenae Swimming Club, Swimzone Racing, Hutt Waterpolo Club and the Wellington Canoepolo Association. Within the regional pools network Naenae is considered a critical venue for aquatic sports training and as a back-up venue for regional and national aquatic sports events. The Wellington Regional Aquatics Centre (WRAC) in Kilbirnie is the only international class aquatic facility in the Wellington Region.

59.  Naenae Pool currently hosts five national aquatic sport events annually and 20-30 local/regional events. 45% of visitors to Naenae Pool are for group, club or programme use. If the pool was not replaced there would be a significant decrease in aquatic sport participation.

60.  In our local pool context Naenae and Huia are considered our major venues. Naenae Pool attracts on average 450,000 visitors per year or 40% of all swimming pool visits in the city. The pool also fills a gap locally by providing recreational opportunities for young teens (10-14 years). If the pool was not replaced it would not be possible to relocate all of this activity to other venues.


61.  Naenae pool continues to play an integral part in the local community providing opportunities for people, particularly children, to learn to swim, exercise, recreate, compete and socialise.

62.  As with all public pools a balance between public and programmed use is essential to maintain a well-used and efficient service. As such, flexibility in design and operation is critical.

Naenae Community Hall

63.  Officers undertook an Initial Seismic Assessment in April/May 2019 of the Naenae Community Hall (the Hall) as due diligence before deciding whether to reopen this facility for public use.

64.  The result of the ISA was 19% of NBS with advice from engineers that:

·      there is little point in undertaking a Detailed Seismic Assessment as it was unlikely to change the outcome of this initial assessment; and

·      the Hall currently poses a significant life safety risk and should be fenced off immediately.

65. The Hall was going to be demolished as part of the Naenae Community Hub development.

66. In the event that the Naenae Hub is either removed from the LTP or pushed back significantly, then Council needs to make a decision about the future of the Naenae Community Hall.

67. It can either:

·      be demolished; or

·      design works started to ascertain a design solution and cost to bring the structure from current to minimum 67% NBS.

68. Officers have been given advice that to develop a solution will take a minimum of six months. Only at this point in time will a cost estimate be possible. Completion of these works will take another minimum six months given the type and nature of work required is complex.


69.  As detailed in the report Council has multiple options to consider in terms of delivery of this project:

·      New build pool and integrated community hub.

·      Refurbishment of pool and new community hub (as previously designed).

·      New build pool only.

·      Refurbishment of pool only.

·      Do nothing.

70.  Each option has a range of considerations noted below.


71.  Officers are of the view that this project meets Council’s Significance Policy thresholds, particularly that ‘the matter under consideration is of public interest or controversial within the community’, together with these relevant criteria in the policy:

a.    Financial threshold of 10% LTP spend change ( ~$63M)

b.    An alternation to the ‘level of service provision of a core Council activity’, which would likely be the case with the new pool/hub option.

The project is therefore likely to trigger the need for a special consultative procedure and an amendment to Council’s LTP as per the Local Government Act.

72.  Ahead of the local body elections in October this year, officers recommend an initial informal pre-consultation process to help inform and guide any special consultative procedure required for an LTP amendment.

73.  Following the election, the incoming Council will meet and consider the consultation feedback and make a decision on how to progress forward. An LTP amendment is required to be audited which adds some complexity to the process and has timing implications. There is also the need to ensure that the public have a reasonable period to consider the options presented in the LTP amendment and are provided with an opportunity to present their views to Council on the options. This is likely to be a minimum period of two to three months in duration. Council could choose to progress this process at pace post the election or to do this as part of a broader piece of work linking into the Annual Plan 2020-2021 timing.

74.  If the refurbishment option is selected there will be no further public engagement after the LTP amendment.

75.  If a new build is selected then officers recommend undertaking a full public and community engagement process. 

76.  This process can easily be replicated and conducted in a time efficient manner, providing the community with an opportunity to comment on how their aspirations are reflected in the facility design. This consultation would engage with local Naenae residents and key stakeholders of the pool/hub (ie, user groups, gym members, key community groups etc,).

77.  This would utilise the existing concept as a starting point and encourage feedback to amend the design and note any current exclusions that the community see as desirable. The approach uses:

·      using the billboard that has been planned for the corner of Everest Avenue and Treadwell Street;

·      written and online surveys distributed in letterboxes and at key community locations;

·      face to face meetings with key community organisations and user groups;

·      open public meetings with officers and the design team;

·      the Eastern Community Panel;

·      Bang the Table; and

·      using the portable container in Naenae to have Council staff engage directly with the community for a period of time.

78.  Outcomes from this consultation process would be presented back to the Project Control Group for consideration and decision, taking into account the fiscal constraints of the project.

79.  Officers were asked to provide some commentary on a co-design process for a new pool. Officers do not recommend that this be pursued for this project. The following has been taken into account when considering this recommendation:

·      Co-design can be an extremely effective way to bring community on a journey with Council on a particular topic/project.

·      Co‑design also sometimes brings new ideas or thoughts to the table that otherwise would not be considered.

·      Co-design also has the ability to provide peer to peer mediation within a community which can be useful.

·      Often co-design is not appropriately resourced or given the time required to be conducted in an effective manner.

·      Officers are acutely aware of the community desire to have a functioning pool operating in Naenae in a timely fashion, and that a co-design process conducted properly would extend project timelines presented in this report by one to two years. This is backed up by colleagues from other Councils who have undertaken similar processes. This could mean opening a new facility to the public extends into 2025.

·      If a co-design process is not conducted properly officers would have concerns that we place large value in a potentially minority view and not focus on mass participation processes. Officers clearly support methods of community engagement which encourage the largest possible number of responses. Generally these are those that are delivered with mixed methods, times, ways to participate and are overall simple and easy to understand and to be involved in. Co-design as a method can deliver this desired outcome, but as noted above needs appropriate resource and time.

·      That the hub project has had extensive consultation already undertaken.

·      An existing engagement plan for the hub project can easily be replicated and delivered.

·      There is a risk that co-design might lead to design which conflicts with core Council functional requirements, or contradicts Council’s/sector adopted strategic priorities.   

·      Council would need to employ an officer to lead this process as we do not currently have capacity to run a proper co-design process with the community in-house.

·      The scope of the architects’ work obtained in procurement would need to extend considerably to allow for co-design to run in parallel to the design process. This would add cost to the estimates provided.

·      We would need to factor in construction cost escalation over the additional period of time for the project budget.

·      Total cost projected increase by undertaking a co-design process is $4-5M for the above three items (construction cost escalation for additional time, additional architect fee requirements, staffing and delivery costs).

·      The largest risk of co-design is setting unrealistic expectations in the community for what they can influence within project fiscal constraints (ie, unless there is an open or ranged project budget then many community ideas may not be possible to achieve alongside core requirements).

Legal Considerations

80.  Legal considerations are covered in consultation and financial sections respectively.

Financial Considerations

81.  The table below details the indicative capital cost comparison between the three major project options:









of Pool

New Pool

New Integrated Pool/Hub

Demolition of Pool




Asbestos Removal








Main Construction Contract (Facility)




External Works




Council Consultants (Project Manager, QS Geotech, peer reviews, Accessibility, Sustainability etc,)








Fit Out




Community and Public Art Initiatives




Relocation of Wellington Electricity Transformer




Contingency @

18% for new build, 30% for refurb




Resource Consent Fees




Building Insurance








Scope Variations




*No quotes currently obtained on these items.

82.  The above costs do not give allowance for any changes in scope to the projects as a result of community input, project governance input etc.

83.  Contingency levels are deemed appropriate for the type of project (ie, 18% new build and 30% refurbishment), although it should be noted there is a significant outstanding risk for the new build options in ground conditions.

84.  To date no geotechnical work has been undertaken and this could have a significant impact on foundation and structure requirements. Officers would recommend that geotechnical work is undertaken early in any new build initiative.

85.  The construction costs presented above are in line with other recent builds.

86.  Councillors need to be aware that this report presents a rough order of costs only, with two significant variables noted above.

Impact on Financial Strategy Limits

87.  While there is no allowance in the financial plan for this scale of work on the Naenae Pool, there is an allowance of $9M for some refurbishment work on the pool, as well as $8.8M for the Naenae Community Hub.

88.  The table below summarises the funding shortfall:



of Pool

New Pool

New Integrated Pool/Hub

Total Cost




LTP Funding








89.  With no change to funding options, each of these projects will result in breaches of the Financial Strategy debt cap as outlined in the following graph.  


Debt limit

Current state

Refurbishment only option

Integrated pool and hub option

New pool only option


Debt to revenue %

$M variance to debt limit



128% (2% gap)


141% (11% over)


157% (27% over)


153% (23% over)




109.9% (0.1% gap)


126% (16% over)


141% (31% over)


136% (26% over)


90.  It should be noted that while the debt cap is breached, the debt is always within the emergency contingency of 170% of revenue.

Project Funding Options

91.  Several funding options are available for Council to consider to assist with mitigating the project costs. These include:

·      Rates increase together with debt funding

·      Removing or deferring projects already in the LTP

·      Asset Sales

·      Reducing Council services

·      A combination of all of the above.

92.  It is recommended that Council considers which funding options are included in this initial consultation. While Council could consult on all options, it is however noted that a number of the funding options, such as reducing service levels or removing/deferring projects, are likely to be unpalatable from a community perspective. There has been significant consultation through previous LTP/Annual Plan processes that has established service levels and projects that are included in Council plans.  Officers are of the view that the first funding option, being a rates increase together with debt funding, is likely to be the preferable funding option as it does not impact significantly on existing Council plans and services. There may however be some minor service changes or projects that could be deferred which may be acceptable and help support the funding solution. Further information on each of the funding options is provided below.

93.  Funding option 1 : Rates increase together with debt funding

·      Council could consider increasing rates by 1% for one, two or three years.  This would have a significant cumulative impact over 20 years. In the short term the rates funding would not be sufficient to fund the full project and debt funding would also be required to supplement the rates funding.

Example – 1% rates increase over two years




Accumulated at Y20

Additional 1% rates 2020/21




Additional 1% rates 2021/22







Debt limit

Current state

Refurbishment only option

Integrated pool and hub option

New pool only option


Debt to revenue %

$M variance to debt limit



128% (2% gap)


135% (5% over)


151% (21% over)


147% (17% over)




109.9% (0.1% gap)


116% (6% over)


131% (21% over)


127% (16% over)


·      In this specific example, the Financial Strategy limit cap breach is alleviated, but it is still breached.

·      Essentially this option uses both increased rates and debt to meet the overall funding requirement over a 20 year period.

·      Council could approve a short term breach in the Financial Strategy limits specifically in order to deliver a solution for Naenae pool.

94.  Funding option 2: Removing or deferring projects already in the LTP

·      Council could choose to remove, defer or realign projects that are already in the LTP.  Depending on the size and timing of the project, this option could help to relieve pressure on the Financial Strategy limits.

·      There has already been public consultation on these projects through previous LTP processes, so it is likely that there would be adverse feedback received from the community on this funding option and it may require further consultation. Some minor deferrals of projects may be acceptable but total removal of projects is unlikely to be palatable.     

·      Examples of potential projects are as follows:

i.     Naenae and Wainuiomata Community Hubs

ii.    Petone Wharf

iii.   Hutt Valley Tennis

iv.   Wainuiomata Sportsville

v.    Bell Park and Te Whiti Park Improvements

vi.   Hutt Valley Gymsports development

vii.  Cycleway/Shared pathway developments.  

·      Additionally, RiverLink ($50M) and Cross Valley Connection ($35M) projects could be considered for removal and or deferring.

95.  Funding option 3 : Asset Sales

The sale of Council assets (non-infrastructure) is also a funding option.  Council could consider such assets as Houses, Marina, other. Given the history of consultation on these services through previous LTP processes, it is not expected that this funding option would be the preferred option.  

96.  Funding option 4 : Reducing Council services

·      Council could choose to reduce operating budgets to mitigate the funding impact.  This would result in a reduction of services, the impact of which Council officers would need to determine.

·      There are a range of service reduction options that could be considered which include:

i.     Reduced Library, Museum, Hub, Aquatic services – reduced hours, facilities available.

ii.    Reduced Community Grant funding.

iii.   Disestablish Community Panels and Boards.

iv.   Reduced recycling services.

v.    Reduced funding support for economic development – Chamber of Commerce, Suburban Shopping precincts, other. 

vi.   Reduced funding for City Events.

vii.  Reduced funding for Environmental Sustainability initiatives.

viii. Other  

·      Very significant reductions in services would be required to meet the budget shortfall outlined for all three options.  The savings would be made up of direct costs as well as savings in associated salaries and other personnel costs. Whilst the community may support minor changes to service levels, it is unlikely that significant service reductions would be supported.

Ongoing Operational Costs

97.  A more detailed business case will need to be developed when design details are agreed and finalised. For all options the overall net-costs (excluding Council overheads, depreciation and interest) of operating the Naenae Pool is not expected to change materially.          


Economic Impact

98.  An economic impact assessment of options is in progress and needs further review.


99.  The following is an indicative timetable with ambitious deadlines due to the urgency and significance of the project. An alternative timeline would be to complete the LTP amendment process together with the Annual Plan 2020-2021 process.



Strengthening Option







































































New Build Option


Floor Plan – Integrated Pool and Hub

 Coneptual Image – Integrated Pool and Hub




















Conceptual Image – new entarnce aligned to Hiliary Court Entrance 

    Conceptual Image – New Pool






Local Naenae Legend



Current State of Wellington Construction Market and Procurement Options





Author: Mike Mercer

Divisional Manager Community Hubs


Author: Allen Yip

Strategic Projects Manager


Author: Marcus Sherwood

Divisional Manager, Parks and Recreation


Author: Stephen Keatley

Strategic Assets and Project Manager


Author: Jenny Livschitz

Chief Financial Officer



Reviewed By: Matt Reid

General Manager City and Community Services


Approved By: Jo Miller

Chief Executive  

Attachment 1

Local Naenae Legend


Local Naenae legend:  two Tanewha who through ‘rupture’ created the streams Te Awamutu and Waiwhetu. 

The Inspiration

The original name of Naenae, Te Ngae Ngae, means ‘to cause effect through rupture’. This idea and Naenae’s history of innovation play an important part in the conceptual design.

Naenae has claims to New Zealand’s first pedestrian mall. One of the strongest representations of this is Hillary Court and the connection it creates from the existing pool through the central precinct and out to the train station. Another is careful planning of the zones of activity created so that even though they are complex in their interaction they are clear and unconfused in what activity is to occur within

The Rupture:

Hillary Court is used to split the two main functions of the Centre, a Pool and Community Hub, that in reality because of their environments shouldn’t be put together.

This ‘rupture’ creates ‘The Street’, which continues the connection of the central precinct through the building and out to the recreational precinct of Naenae including the bowling club and the basketball court.

‘The Street’ becomes an important space in itself with the community kitchen and access to the auditorium at the end and, along its length, to all of the main functions of the Centre.

The siting of the building is based around the connection through to the central precinct as mentioned above. It allows for the treed parks at each end and the site, the onsite parking to be maintained on the west end and good connections into the building as required by internal function. The area along Everest Avenue is activated by developing it as a social space.

The Taniwha:

Maori legend says that the Waiwhetu Stream and Te Awamutu River were created by two Taniwha who smelt a human entering a freshwater lake near the cemetery and ended up ripping each other apart.

Taniwha, whilst thought of as a water monster and guardian of an area, could also be considered an unknown phenomenon such as an earthquake or a landslide. The idea of this, along with the ‘rupture’ idea, have helped shape the Centre. Two Taniwha coming together, in this case, to create something positive and significant for the Community.

The forms and materials of the Pool and Community Hub are as required by their function. The moist air and volume of the Pool environment have meant high ceilings and water-resistant materials. This includes the makeup of the main structure being timber beams and precast concrete columns, robust and easily cleanable walls and non-slip flooring.

The Community Hub is set lower with softer, but still robust, materials including a steel structure to create the clear spans, carpet tiles and other acoustic linings.

Despite the differences a similar language ties the two buildings together. The filtered glass bays of the Community Hub with a pattern representative of the basket of knowledge translate into tall glass and patterned precast panels in the Pool. This pattern is used as a place holder for further narrative ideas to be developed. The shape could be the teeth clashing or the spines along the back or the claws grasping at the landscape. The skylights across the top of the Pool are of a similar shape and drop down into the roof of Community Hub.

The narrative ideas above were developed after a session with Kura Moeahu, Kaiwhakarite Maori –Senior Advisor, Parliament Services and Chairman – Waiwhetu Marae trust, Te Runanga o Taranaki Whanui ki te Upoko o te Ika a Maui Inc. We would like to thank him for the input and hope to develop these ideas further as the design progresses.

The Pool and Community Hub will become a Guardian not just acting locally but attracting people from far and wide creating a connected and diverse community invigorating Naenae for years to come.

Attachment 2

Current State of Wellington Construction Market and Procurement Options


The current state of the Wellington Construction Market and Procurement options for Naenae Pool in light of the forecasted market conditions

________________________________________________________________The Wellington Construction Market

Short History

Over the last 5 years the construction sector underwent some significant changes. These include rising construction costs, labour shortages, high demand, ongoing changes in legislative requirements and natural events such as flooding and earthquakes.

We have also seen the rise and fall of some of the main construction companies in the market, following on from demise of Mainzeal in 2011. These include Hawkins Orange and Ebert Construction going into receivership and Fletcher Building withdrawing from vertical construction.

Leading Wellington Construction Firms

The main leading construction, infrastructure and project management firms active in the Wellington Market is LT Mcguiness Ltd, Naylor Love, McKee Fehl Construction and Hawkins Construction owned by Downer Group.  

Other rising construction, infrastructure and project management firms on the rise in the Wellington Market are Maycroft Construction, Armstrong Downs, Southbase Construction and Watts & Hughes Construction.

Wellington Construction economic forecast/pipeline

The future pipeline for Wellington is still strong, signalling a continuation of the pressures of the past two years.

MBIE’s National Construction Pipeline Report 2018[2] states that the Wellington region had the strongest growth of any of the regions featured in this report in 2017, with total construction value increasing 11% to $2.8b.

Total construction value is forecast to continue at this raised level before growing again in 2020 by 20% to $3.4b in 2023. Residential building activity is expected to drive growth in Wellington with Non-residential building activity expected to reduce slowly from the $0.8b in 2017 to around $0.5b in 2020.

·      The value of Wellington’s non-residential building activity is expected to reduce by 30% to $0.5b in 2020 and then level out to 2023

·      Since 2015 the Wellington infrastructure activity held steady around the $0.5b per annum and is expected to continue along this line until 2023. Strong Infrastructure project intentions in the region is indicated by the high value of research data.

The RLB Forecast Report 89, Fourth Quarter 2018[3] indicate that construction picked up in the second quarter of 2018 and that underlying construction demand remains very strong especially in the residential sector despite some slowing in the pipeline of construction work in some areas.

Some key points.

·    Architects can expect some slowing in the pipeline of non-residential and Government work as shown in the NZIER Quarterly Survey of Business Opinion (QSBO).

·    An increase of technicians and trades people moving to New Zealand is expected as Government focuses on bringing workers to areas where labour demand is greatest.

·    The construction sector continues to face various challenges such as low operating margins, labour shortages and uncertainty of cashflow. This is particularly evident amongst smaller and mid-sized firms.

·    Construction demand for concrete in Wellington has risen slightly since 2015 with Auckland and its surrounding regions leading demand.

Influencing Factors on the construction market

The rising construction cost and future pipeline has led to specific pressure points especially around supply and demand constraints, skills shortages and wage pressures.

Skill shortages

Various industry leaders have been vocal about the skills shortages:

·    Ruma Karaitiana, the previous chief executive of the Building and Construction Industry Training Organisation (BCITO) stated ‘‘…construction is now one of the fastest growing parts of the economy, predicted to grow 3.2 per cent per annum until at least 2017.’’ He specified that the most recent forecasts showed about 1600 carpenters would be needed by 2018. About 5500 project builders, including carpenters, would be required, and the bricklaying industry would need about 150 workers a year. Experts say one of the distinguishing characteristics of this construction cycle is the breadth of the shortage of workers, with engineers, quantity surveyors, architects and building scientists also in extremely short supply[4].

·    IPENZ chief executive Andrew Cleland says some of the work in Christchurch is not able to be carried out as quickly as people would like because of the high volume of work and not enough engineers with the right competence for technically demanding work. Immigrant engineers have helped meet some of the demand but take time to get up to speed with local requirements for critical work.

The shortage of engineers is not confined to Christchurch though. There is a nationwide demand for engineering expertise. Engineering disciplines at Immigration New Zealand[5] in the category of long-term skills' shortages include structural, civil, chemical, electrical and mechanical. The Ministry of Business, Innovation and Employment website (Immigration) also flags a need for quantity surveyors and project managers, and some demand for tradesmen such as painters and carpenters.

MBIE’s Future demand for Construction Workers 2nd Edition[6] projects a 9 percent growth in demand for Wellington construction related workers. Project Builders is in high demand (up 14 percent) followed by Truck Drivers (up 10 percent). The overall regional increase in construction related occupations is approximately 4,200 between 2016 and 2013. When compared to earlier projections prepared in 2016, 700 additional employees wil be required over the period 20121.  Stats NZ report the regions unemployment rate at 3.7 percent in Q1, 2019  as opposed to the national figure of 4.3 per cent.

Wage Increases

According to the latest labour market statistics in March 2019, the LCI (Labour Cost Index) salary and wage rates (including overtime) increased 2.3 percent over the year. The gap between wage rates and consumer inflation increased further in the latest quarter, as wage growth remained steady and CPI inflation continued to weaken. Wage inflation has now been higher or equal to the CPI for four-and-a-half years. Contributing to higher construction costs.

Supply and demand constraints

·    The construction industry is classified as a high growth industry according to Statistics NZ. The latest Business Demography Statistics show that for the construction industry enterprises increased to 61,860 (up 3.1 percent) from February 2017 and during the same period 4,931 closed their doors[7]. This high churn leads to severe supply chain constraints or even a breakdown of consistent and reliable supply, for example Mainzeal.


·    Building cost inflation is predicted to ease below 4 percent later in 2019 before settling down to just over 3 percent by the end of 20123[8].


·    Earthquake strengthening activity continues to contribute to demand in non-residential construction.

Legislative changes and Design

Earthquake standards changed resulting in previously seismic acceptable buildings now falling below the NBS line and requiring strengthening to comply with code.


Inflation contributed to increased materials and labour costs, combined with increasing demand for construction has pushing overall construction cost significantly upwards. The construction cost has risen significantly due to a combination of factors including the cyclical nature of the industry, changes in construction methods, supply and demand pressures as well as legislative changes.

New Zealand construction industry is highly cyclical with significant boom and bust periods. This implicitly leads to a high number of deaths and births of construction (and construction related) companies. The consequence of this high churn is supply chain constraints and lack of constructive and sufficient long-term planning to meet varying demand. These constraints are even more pronounced in Christchurch due to the rebuild as well as in Auckland as a result of rapid expansion.

New innovative methods and designs have been introduced leading to a significant increase in demand for products such as engineered structural steel and precast concrete. Demand has outstripped supply leading to capacity issues resulting in substantial price increases for these products.

Legislative changes including the ongoing changes in the building code has increased the demand for compliance on contractors. Constant legislative changes within the sector requires constant up skilling of staff by already under resourced small construction SMEs.

Environmental events

The report by Local Government New Zealand found that sea level rise and flooding could affect $14 billion worth of council-owned infrastructure assets across New Zealand without . This value does not take into consideration cost to central government or private interests and could place increased demand on the construction sector over the next decade[9].

What does this mean for Naenae Pool?

From the evidence above it is clear that the New Zealand construction industry is complex. It is apparent that timing and tight management of the up- and downstream supply and demand value chain will be needed to provide cost effective solutions for clients.

Despite on-going demand for construction in the region, indications predict a slight ease in the Wellington construction market over the next couple of years although construction cost is expected to outperform CPI inflation.

What this mean for Naenae Pool depends on Hutt City Council’s decision on options for repair or reconstruction of the asset. Strong demand for earthquake strengthening in the region will mean less available contractors and inflated non-competitive pricing.

Demolition and reconstruction of the asset may present slightly better procurement options due to diminishing construction workload forecast to 20123. The scale of the project will also draw attention among the main contractor market leaders.


Procurement Options for Construction

Methods of Procurement

Traditional Method

Traditional method is a procurement method that the design work will separate from construction. Upon the completion of the design, client will appoint a main contractor following a tender process to carry out the works through bidding.

Disadvantages of this method resolve around time where a lot of time is devoted to the design element. The cost may be higher as the quantities are captured in the design and specifications and the contractor has little flexibility to manage the price.

This method is recommended for use in both options where the pool is going to be refurbished and strengthened as well as for the demolition and reconstruction of the pool.

Design & Build Method

Design and build method of procurement is a way to fast track the construction and the contractor should dictate a fixed cost or maximum price that offers certainty to the client. A single line of contact also smoothens the line of communication and avoids fall outs.

The down side is that the contractor now has interest in cutting costs that may compromise quality and quantity of materials. Margins will be tight as they need to make a profit under a set maximum price calculated under competitive circumstances. It also reduces flexibility as the contractor may apply huge penalties to implement changes.

This option is recommended for use in conjunction with the ECI option below for demolition and reconstruction of the building.

Early Contractor Involvement (ECI)

This procurement model allows for the early engagement of the contractor during the design stage. The contractor provides constructability, methodology and suitable materials input throughout the design period and have the opportunity to work with subcontractors ahead of the tender stage.

This option is recommended for consideration when the pool is to be demolished and rebuild.

Positive attributes:

•Selection by value

·  Buildability Challenges

• Opportunity for innovation

• Client Involvement

• Target Price

• Accuracy of estimating

• Programme Savings

• Collaborative approach


• Reduced price tension/non-competitive pricing  (value for money – Perceived or real?)

• Must have a clear project objective

• Incentive to deliver?

• Resource Requirements

Construction Management (Not Recommended)

Construction management is best suited to experienced developers with a large in house experience team to deal with complex projects. This is normally performed by the main contractor who packages each element and let it for tender to sub-contractors to complete the project.

The benefit is cost as you know you are getting the best cost by tendering each element across the board. The developer will also retain control of quantity and changes can be made throughout the development at minimum penalty compared to the other options.

This is a high time and management intense process that require the hire of an experienced construction manager and with the potential for a large amount of contracts to be put in place with a room for error.

[1] Work required prior to the making of any of these decisions may be deleted.