Meeting documents

The Cabinet considered a report providing an update on the Amersham Multi Storey Car Park Development Project which sought approval of the final business case, amended capital programme and confirmation on the contracts for construction. The proposed project would provide a total of 1,046 car park spaces, resulting in an increase of 366 spaces. The additional parking spaces from the project were required in order to meet the increased demand for parking and were supported by a detailed business case that had been developed, as required by the Council’s financial strategy, using realistic and prudent assumptions on potential income and expenditure. The proposed project was considered important to meet the parking needs and would also help generate additional income.

 

The report was considered by the Resources Overview Committee on 21 June and the Committee’s comments were noted by the Cabinet.      A number of questions had been raised by the Committee, and further clarification on the pre-construction costs, total overall costs and parking charges in relation to annual inflation, had been requested. A number of additional questions were also raised by Committee Members following the meeting. A supplementary appendix was circulated at the meeting responding to those questions raised.

 

A number of options had been considered in order to meet parking needs. The proposal set out in the report, which took into account the parking needs and financial implications, and was considered the best option. It was confirmed that Pick Everard, an independent consultant, had provided cost certainty on the proposals. During the budget setting process the impact that the proposed project would have on the Council’s Medium Term Financial Strategy and treasury management strategy had been taken into account.

 

Interest rates were at a historic low and in light of this it was therefore sensible to consider borrowing to finance the project which would provide long term benefits to the Council. The risk that the cost of borrowing could change was mitigated through the use of a 40 year fixed rate loan from the Public Loans Board to finance the construction costs.

 

Another risk was that income from the car park would be lower than estimated. The demand for parking spaces was subject to change however the car park was already at full capacity and demand was unlikely to reduce in the medium term. An extra 366 parking spaces, as proposed, would enable the car part to operate at 85% capacity. This was the maximum number of spaces that could be provided on that site and included the creation of an additional deck. A lower than anticipated level of income was not therefore considered a significant risk. It was confirmed that the income forecasts for the project were based on cautious estimates of increased usage, and although no detailed analysis of the impact from higher levels of income had been undertaken, this would only benefit the project.

 

The Council could also change car park prices, and a 3% increase had been included in the business case. Car park prices were due to change later this year and would still remain lower than competing car parks. One of the suggestions from the Resources Overview Committee was that the business plan should show charges being increased every 3 years, rather than annually, and the tabled appendix included details of the financial effect of this.

 

At the invitation of the Leader Councillors J Gladwin, D Phillips and P Jones addressed the meeting. It was advised that although there was agreement that Amersham required additional car parking there was concern regarding the following key issues:

 

·         There was uncertainty regarding the impact of parking displacement arising from an increase in parking prices and changes to on-street parking restrictions, such as additional no parking areas.

·         It was suggested that parking fees, when increased, be rounded up to a practical whole number

·         There was also concern that a 50p increase in parking charges each year would not be realised

·         There was concern about the impact on demand arising from additional spaces being created in Sycamore Road and King George V House car parks

·         It was suggested that relaying the surface on the top floor of the car park be shown as a separate project

·         It was recommended that the figures in the business case be reviewed again particularly in light of the risk of higher interest rates.

·         Further clarity was requested in relation to the pre-construction costs and initial design costs.

·         Concern was raised regarding the potential increased cost arising from the risks identified by Pick Everard such as archaeological remains, Transport for London, and other contingencies. It was considered that the likelihood of these having any material impact was low.

·         It was suggested that a proportion of the Council’s reserves be used to lower the level of borrowing required particularly in light of the low levels of income from Council investments.

 

Regarding the pre-construction costs it was confirmed that these had increased from £591,000 to £617,000 with cost certainty and any further variation would now be the contractor’s risk. The £110,000 initial design costs were also included within the pre-construction cost.

 

The relaying of the surface on the top floor had been included in the project costs because it was more cost efficient to carry the work out at the same time. This could be included as part of contract but listed as a separate project cost for the purpose of the business case.

 

Regarding the impact from extra spaces provided elsewhere, it was noted that this was difficult to model due to the number of different factors; however the overall effect was estimated to result in around half of the number of staff parking in Sycamore Road temporarily during the construction of the car park.

 

It was clarified that the Council’s reserves were allocated for a variety of different schemes and it was not considered desirable to commit a significant proportion of the reserves to a single project where alternative funding was available. The budget setting process had taken this into account. The Council was also gaining cost certainty through the use of a 40 year fixed rate loan.

 

The Council’s Constitution required that any applications submitted by the Council be considered by the Planning Committee and Full Council. The Planning Committee meeting on 22 June considered the planning application relating to the project and agreed to recommend to Full Council that the Council’s own planning application relating to the Multi Storey Car Park be approved, subject to amendments to conditions 2 and 13. Reference was made to the amendments made by the Planning Committee and the costs associated with the amendments relating to the total landscaping scheme.

 

Following the discussion, the Cabinet then

 

RESOLVED -

 

1.         That the current position of the Amersham Multi Storey Car Park Development Project be noted.

 

2.         That the final business case for the project be agreed.

 

3.         That, subject to the decision of the Planning Committee that the Head of Environment, in consultation with the relevant Portfolio Holder and Director of Services, be authorised to conclude the delivery agreement between Balfour Beatty and the Council for the construction phase.

 

4.         That the Head of Finance be authorised to carry out the necessary arrangements to obtain the loan finance.

 

5.         That the Head of Environment be authorised to negotiate and conclude any necessary agreements to allow the development to proceed through to completion.

 

6.         That the 2018/19 revenue budgets include the additional revenue operating costs of a larger car park operational from September 2018.

 

7.         To note and agree that the cost of the pre-construction costs have increased from £591,000 to £617,000 for delay due to planning and Scape fees.

 

AND RECOMMENDED -
8.	That £10,800,000 be added to the capital programme for the construction of the project.