Museum decision on Committee agenda
A decision about the future of Rotorua’s museum is on the agenda for next week’s Infrastructure and Environment Committee meeting.
The community was recently consulted on options for the museum due to cost escalations since the project was committed to by the previous Council through the 2018-28 and 2021-31 long-term plans.
Elected members now need to decide whether to proceed with the project.
Following the previous commitment to restore and strengthen Te Whare Taonga o Te Arawa external funding agreements were entered into for:
- $17m Provincial Growth Fund (PGF) (Kānoa);
- $10m Rotorua Trust;
- $6m Lotteries Grants Board (Significant Projects Fund);
- $5m Manatū Taonga Ministry Culture and Heritage.
With a Council contribution of $15.5m, the total confirmed funding was $53.5m.
Following comprehensive testing, design and peer reviews, consenting and approaching the market, the total project cost (including costs to date, construction and contingency) is now $81.4m (a gap of $27.9m).
Given the cost increase, Council recently asked the community whether they wished to:
A. Continue to fully restore the building and reopen as a Museum (including an additional $9m of Council funding);
B. Stage the project (noting that the Museum would remain closed until the end of Stage 2);
C. Find an alternative location for the Museum and its services.
There is potential for further external funding but this is dependent on Council deciding to proceed so additional external funding to close the gap cannot be confirmed before a Council decision.
Multiple meetings, site walk-throughs and workshops have been held to provide elected members with the information necessary to understand the project, the feasibility of alternative options and the risks of the viable options.
Community consultation resulted in 776 submissions with 85% in support of Option A (which included a proposed Council contribution of an additional $9m to help close the funding gap).
Option B was supported by 3% of submitters. During consultation external funders (other than Kānoa) confirmed they would not support this option and the corresponding loss of $21.35m funding means this option is no longer viable.
Option C (stopping the project) was supported by 12%. This would require repayment of $16.5m of already drawn-down funding + $1m to make the building safe. This would require $2m of cash on hand and $15.5m of borrowing. Under this option, construction work and costs would be deferred but are nevertheless still required in some form by 2042/2052.
It is recommended that the project proceed, with appropriate conditions to limit Council’s contribution as follows:
- Limit Council’s contribution to the existing $15.5m (approved in the 2018 and 2021 LTPs).
- Require full external funding to fill the funding gap.
- Preserve Council’s balance sheet to address any costs over $81.4m.
- Directing staff to finalise and present for committee approval a construction contract that does not exceed actual external funding secured.
- The construction contract must not over-commit Council funding.
Structuring the decision in this way would allow Council to unlock the additional external funding needed and ensures construction can begin, with the ability to release additional scope as full funding is secured.
The advice to elected members is that this is the most prudent way to retain current funding and enable Council to secure additional funding, while also ensuring that Council can limit any risk of a funding shortfall.
Go to p10 of the meeting agenda to read the full report on this matter.
Also on the agenda
The Committee will receive an update on Rotorua Lakes Council’s water supplies’ fluoridation programme, as directed by the Director General of Health. Go to p33 of the meeting agenda to read the report on this matter.
The Committee will receive an operational update from the Active and Engaged Communities team which looks after Rotorua’s open spaces and is part of the Community Wellbeing Group. Go to p49 of the meeting agenda to read the report.
The Committee will receive updates from the Infrastructure and Environmental Solutions group. Go to p53 of the meeting agenda to read this report.
Go to this link on Council’s website to view the full agenda for next week’s meeting: public-agenda-infrastructure-and-environment-committee-meeting-2-august-2023.pdf (rotorualakescouncil.nz)
Next Wednesday’s (2 August 2023) meeting starts at 9.30am in the Council Chamber and is open to the public to attend.
The meeting will also be livestreamed and can be watched live or later via Council’s YouTube channel: Rotorua Lakes Council - YouTube