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Department calls for pool project audit

The Local Government Department has delivered a damning report to Gosford Council over its handling of the Peninsula Leisure Centre development and has recommended an independent audit of the project.

The department has questioned "the adequacy of project and budget management, the adequacy of council's role as consent authority and the process for keeping the public informed of the project and of dealing with public complaints about the project".

The "Promoting Better Practice" report, published in December last year by the department, dealt in part with the centre because it was the subject of a "considerable number of concerns".

The findings of the report, published on the department's website, have not yet been reported to councillors or ratepayers through the council meeting agenda.

Peninsula News discovered the report through an internet search.

The report stated that "based on this review, the department believes council should arrange for an independent audit of the management of its Peninsula Regional Leisure Centre project".

The department said that concerns had been raised "generally about an alleged flawed assessment process, poor community consultation and poor financial control and management".

There were also "a number of concerns" raised about the acoustic performance of the building and the impact on surrounding houses.

The department's examination of the project and of council's performance were based on information and materials gathered in 2004 by its review team, and in particular on "select information and materials" provided to the review team by council staff during the course of the review.

The report criticised the way the council assessed its own development and other applications, when it was both the applicant and consent authority and "particularly so" in the case of the leisure centre.

"A council employee issued the construction certificate for the project," the report stated.

"There are some indications of pressure being put on that officer on the matter by others at council.

"There are other potential aspects of concern in relation to the issue of that certificate."

The report stated that conflicts of roles were also noted by council's internal auditor, who "also happens to have considerable construction industry experience".

Concerns were expressed about the "blurring of roles" of consultant designer for the project and of construction manager, both being fulfilled by the same firm of consultant architects.

The report stated that questions arose as to the appropriateness of council's responses to and management of the community concerns stating that "cost escalations and public liability risks may, amongst other things, be the result of a failure to do so".

It stated that "the consultant architect was appointed under a contract, apparently after some sort of tendering process was undertaken, despite the fact that his expected fees were estimated to be less than $100,000.

"However, this was based on the then projected cost of the whole project of less than $2 million.

"After various design changes and expansions of the scope of works, the project now stands as a $25 million project.

"The architect's fees earned to July 23, 2004, amounted to $1.239 million, out of an expected $1.718 million at the end of the project."

The departmental report stated that "questions therefore arise as to whether there should have been a further tendering process and whether there was a sufficient review of the position and engagement of the architect undertaken".

"The evidence indicates that while council considered a report in late January 2003, at a time when all the revised design work was just about then complete, it was persuaded that it did not need to tender further, and could proceed immediately to revise and confirm the architect's appointment, in reliance on the extenuating circumstances exemption from tendering under section 55 (3) of the Local Government Act 1993."

The report stated that "council appears to have followed an expressions of interest process for the two main items in relation to the project, being the construction of the building and the supply of pool water filtration equipment.

"When, however, it next moved to invite formal tenders from those companies selected as successful lodgers of expressions of interest, it is unclear whether council followed the requirements of clause 9(4)."

It said that clause 9(4) gave council the option to either invite tenders from all applicants, or such of them as council considered would be able to fulfill the requirements of the proposed contract, or it could decline to invite tenders from any of the applicants.

Council received 16 applications for the main building contract and on June 24, 2003, determined to invite tenders from six of them.

The report stated that "it would appear that the consultant architect recommended that two other firms be added to that list", neither of which had originally lodged expressions of interest.

Council resolved that both firms be invited to tender, and one of them won the contract.

The review stated that "the later staff report is extremely brief" and provided "no explanation for the recommendation and therefore no explanation for the basis for this action".

It also stated that it was unclear whether the community had been given sufficient information about the project cost, including additional costs for consultants and necessary roadwork in the vicinity of the centre.

It also questioned council's efforts to keep the community adequately informed in many aspects of the project.

It questioned council's use of restricted funds in its Sewer Fund for the project, stating is unclear whether it "would amount to a breach of sections 409 and 410 of the Act" which entailed about $400,000 of the total funding for the project.

Commenting on a loan for the centre worth $14.7 million, partly for the construction of the centre, the review stated it was unclear whether council had duly complied with all aspects of the loan approval, and in particular with the need to conduct a full capital expenditure review, and to cover all aspects of the review.

"A question also arises as to council's reliance on section 96 of the Environmental Planning and Assessment Act 1979 to authorise what would appear to be more than minimal changes to the DA and previous development consents for the Peninsula Regional Leisure Centre."

At the time of going to press, Gosford Council had not replied to written questions submitted by Peninsula News about its response to the Local Government Department report.



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