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Late Item

 

Council  Agenda

 

 

 

14 October 2015

 

 

 

 

 

ALL INFORMATION AVAILABLE IN VARIOUS FORMATS ON REQUEST

 

 

 


CITY OF BUSSELTON

Late Items FOR THE Council  MEETING TO BE HELD ON 14 October 2015

TABLE OF CONTENTS

 

ITEM NO.                                        SUBJECT                                                                                                                              PAGE NO.

15..... Chief Executive Officer's Report. 3

15.4        RFT05/15 - AWARD OF CONTRACT FOR CONSTRUCTION OF THE CITY'S CIVIC AND ADMINISTRATION FACILITY. 3

 


Council                                                                                      3                                                                  14 October 2015

15.             Chief Executive Officer's Report

15.4           RFT05/15 - AWARD OF CONTRACT FOR CONSTRUCTION OF THE CITY'S CIVIC AND ADMINISTRATION FACILITY

SUBJECT INDEX:

Admin Building Working Group

STRATEGIC OBJECTIVE:

Infrastructure assets are well maintained and responsibly managed to provide for future generations.

BUSINESS UNIT:

Major Projects

ACTIVITY UNIT:

Major Projects

REPORTING OFFICER:

Manager, Major Projects - Paul Crewe

AUTHORISING OFFICER:

Chief Executive Officer - Mike Archer

VOTING REQUIREMENT:

Absolute Majority

ATTACHMENTS:

Attachment a   Confidential Tender Evaluation and Recommendation Report

Attachment b    Perspective - Corner Causeway Road and Southern Drive

Attachment c    Perspective - From Causeway Bridge

Attachment d   Perspective - From Causeway Road

Attachment e    Perspective - From Carpark

Attachment f    Perspective - From Vasse River

Attachment g   Perspective - Proposed Additional Floor

Attachment h   Ground Floor Plan

Attachment i     First Floor Plan

Attachment j     Second Floor Plan

Attachment k    Confidential Budget / Cash Flow Model for Civic and Administration Building

Attachment l    Confidential Opinion of Probable Cost

Attachment m  Confidential Long-term Financial Plan for the Civic and Administration Facility

Attachment n   Confidential Prices for Conforming Tender and Two Alternative Tenders from Preferred Tenderer

Attachment o   Confidential Alernative Proposal - Option 2 from Preferred Tenderer

Attachment p    Confidential Alternative Proposal - Option 3 from Preferred Tenderer

Attachment q   Contingency Information

Attachment r    Confidential Loose Furniture Budget

Attachment s    Confidential Professional Fees Budget

Attachment t    Confidential Landscaping Budget

Attachment u   Landscaping Plan

Attachment v   Confidential Carparking Budget

Attachment w  Confidential Timber Budget Clarification

Attachment x    Confidential Function Room Fitout Budget

Attachment y    Confidential Relocation Expenses Budget

Attachment z    Confidential Offsite Service Connection Budget

Attachment aa Confidential Offsite Service Connection Information

Attachment ab Confidential Revenue Budget

Attachment ac Confidential Potential Cost Savings  

  

This item is presented for consideration for acceptance as a late item for the 14 October, 2015 Council meeting to allow the project to proceed in accordance with established timeframes and to avoid undue and potentially costly delays.

 

PRÉCIS

 

The City of Busselton issued RFT 05/15 for the construction of the City of Busselton’s Civic and Administration Facility and received seven submissions.

 

This tender was released to registered builders who had pre-qualified through an EOI process endorsed by Council (C105/118) and recognised by the City of Busselton as acceptable tenderers for the construction project.

 

This report summarises the tender responses and makes recommendation to award the tender. 

 

BACKGROUND

 

The objectives of this Request for Tender are to appoint a suitably qualified contractor for the construction of the City of Busselton’s Civic and Administration Facility.  Under Council’s direction, the current proposal that has been developed moved away from the previous Civic Precinct plan that was a significantly more expensive option.

 

This request specified the requirements of the City and invited suitably qualified and experienced respondents to submit bids to enter into a contract for the construction of the City of Busselton’s Civic and Administration Facility in accordance with the specification provided.

 

The City’s new Civic and Administration Facility is to be constructed in accordance with the specification attached to the contract.  The contract and specification was prepared by City officers, MCG Architects in conjunction with JCY Architects and the Herbert Smith Freehills Law firm.

 

The Specification included:

 

(a)       Separable Portion 1; being construction of a new three storey building of approximately 4,000m2, parallel with Causeway Road (east wing); and

 

(b)       Separable Portion 2; being:

(i)    Demolition of the existing administration office buildings (approximately 1,835sqm), except for the existing 2 storey section (approximately 752sqm) which has to be renovated and integrated with the new buildings; and

(ii)   Construction of a new two storey building (west wing) replacing the existing single storey structure along Southern Drive.

 

Prior to the work under the Contract in respect of Separable Portion 2 commencing, the City was to arrange for items that it wished to be salvaged from the existing administration office to be removed at the City’s cost and risk.

 

It was understood that certain external works including landscaping and carparks will be undertaken by the City and are excluded from the works to be undertaken and not form part of the scope of works for the building.

 

It was intended for the construction phase of the project to be staged to allow for required staff to be accommodated on site during construction of the new building. Details of the:                                                                            

(a)   number of staff to be accommodated;

(b) proposed area(s) where they will be located/accommodated; and

(c)   proposed staging of the project to allow for such accommodation

was provided in the specification and in the site plan(s) attached to the contract.

 

Tenders were also invited from the builders to submit alternative prices on a proposed construction methodology which housed staff off-site with construction to take place in one stage, if the costs associated with this alternative were deemed viable and cost efficient, due to the economies of scale of having all the plant and equipment onsite at one time.

 

The successful tenderer will be reporting to a construction based project team, chaired by the CEO and including the City’s architects.

 

The request for tender for the construction of the City of Busselton’s Civic and Administration Facility was issued on the 7th of August 2015 and tenders closed on the 23rd of September 2015.

 

The City issued eight sets of documents to the registered builders on the City’s acceptable builder list for the project, and received seven tender submissions.

 

A tender evaluation panel was formed to evaluate all tenders submissions prior to the evaluation meeting and the tenders were assessed in accordance with the relevant WALGA guidelines and in the manner described in the Officer Comment section below.

 

A comprehensive summary of these responses and pricing schedules has been included in the confidential attachments.

 

STATUTORY ENVIRONMENT

 

Section 3.57 of Local Government Act 1995 requires “a local government to invite tenders before it enters into a contract of a prescribed kind under which another person is to supply goods and services”.

 

Part 4 (Tenders) of the Local Government (Functions and General) Regulations 1996 require that tenders be publicly invited for such contracts where the estimated cost of providing the total service exceeds $150,000.

 

Compliance with the Local Government Act 1995 section 3.57 is required in the issuing and tendering of contracts.

 

RELEVANT PLANS AND POLICIES

 

The City’s purchasing, tender selection criteria, occupational health and safety and engineering technical standards and specifications were all relevant to this tender and have been adhered to in the process of requesting and evaluating tenders.

 

FINANCIAL AND LTFP IMPLICATIONS

 

In preparation for this project, the City drew borrowings of $18m over a 20 year term at an attractive interest rate of 4.51% fixed for 20 years at the commencement of the 2014-15 financial year.  In addition at the time a further 0.1% was applied to the outstanding principal on the loan by the State Government’s levy fee, however, in the 2015 State budget this levy was raised by an additional 0.5%, much to the disappointment of the local government industry.  It is anticipated that at the completion of the construction project in approximately January 2017, if the recommendation to proceed with a single stage construction program is approved, the City will have 17.5 years remaining on the original loan, having paid off $1.5m of the principal in the initial 2.5 years.  The outstanding principal will be in the vicinity of $16.45m.

 

Based on the preferred tenderer’s alternative proposal (single-stage option 3 or 2) and in consideration of the entire forecast budget, a master sheet provided as “Attachment K” highlights that the project is in line with the Council’s budget and closely aligns with the City’s Long-term Financial Plan as amended from time to time.

 

Based on the preferred tender, this equates to a built form price of $2,900 per square metre, which includes all professional fees, but excludes loose furnishings, carparking and landscaping costs.  The actual construction cost is $2,625 per sqm excluding professional fees, which compares favourably with the CRC building constructed three years ago of approximately $2,700 per sqm, which was a much less complex project.   The master sheet identifies that if the Council was to accept the preferred tenderer’s lowest cost option it would meet the budget forecast, or if the second single-stage option is taken the City would need to find an additional $290,000, or if it was to accept the original proposal of a two-stage construction program then $819,000 in additional funds would need to be found.

 

The master sheet highlights not only the contract building costs but also all other known costs associated with the project, such as relocation, furniture and fitout etc.   Provided as “Attachments R to AB” is information on the further breakdown of these components of proposed costs and revenue.  As noted on the foot of the master sheet there are however a couple of issues that the Council will need to consider in making a final determination as follows.

 

Construction Contingency

 

Provisionally through the course of the project and based on advice from the quantity surveyor (QS) a sum of $500,000 has been incorporated to cover for unexpected eventualities that might occur with contract variations through the course of the building contract.  This represents approximately 2.5% of the contract value.  However, it is the opinion of officers and has been confirmed by the architect, that a more realistic contingency should be 5% or $1m.  This is not to say that the City would necessarily spend up to this amount but it would provide a buffer in the case of unexpected variations which could be either as a result of architectural drawings or specifications missing some detail or the City wishing to make an improvement.  This is a highly complex project due to the fact that it is a combination of a new build adjoining a refurbished older building and while every effort has been made by officers and the architects, there can be no guarantee that an oversight will not be encountered, which is a reality that occurs on all projects.

 

Revenue

 

Unfortunately, when the City first put its Long-term Financial Plan together for the project three years ago, LotteryWest was identified as a source of funding for the project of $500,000 towards the community function room space/fitout.  As Councillors will recall, the original idea behind this allocation was when Council was considering a performing arts aspect to be included.   It is now evident that we will not receive $500,000 from LotteryWest towards the fitout of the community function room area.    However, the loss of this revenue to the project has been to some extent offset by the lowest tender coming in at an attractive price.

 

Potential Cost Savings

 

In addition, and this can only be determined when a preferred tenderer has been endorsed, additional savings could be achieved by the review of the design and material specifications which potentially could achieve savings in the vicinity of $200-$300k, without potentially compromising the quality or finish of the building, but this needs to be qualified.  These funds could be channelled back into providing funds for the additional contingency over and above the $500,000, which it is recommended the City do if such savings can be achieved.

 


 

Additional Level to Building Two

 

The preferred tenderer has advised that, due to economies of scale, the City could also consider undertaking to erect the outer wall sections and glazing of the third storey at an approximate cost of $500,000, but that would not include fitout or internal partitioning.  This would provide an additional 650 sqm of office space and would provide the opportunity to future proof the building for staff accommodation for an even longer period of time.  The current plans allow for the building to accommodate the future needs in accordance with the workforce plan for a minimum period of 15-20 years.  The additional space would potentially get the Council through 25-30 years, although this would be dependent on future services and the City’s growth.

 

Opportunities in the meantime to utilise this space if it was eventually fitted out may include the City to lease the space commercially and receive a conservative return of approximately $200-250 per sqm per annum, therefore returning between $130,000 and $162,500 per annum, effectively paying for the addition and likely fitout costs within five years.  As a comparison community CRC tenants are currently paying $140 per sqm per annum (not a commercial rate). 

 

This space could also assist as an option when conducting negotiations with the Department of Parks and Wildlife to entice them to vacate their Queen Street site for a future performing arts/convention centre.  Unfortunately, there has not been enough time to do further work on this matter but it is something that the Council could consider.  Officers would need some direction as to whether the Council would be interested in pursuing this option as it will require negotiation as to the final pricing of the lump sum building contract.  Also the means by which the additional funding will be provided would have to be considered.  At this stage, if the Council was inclined to support the additional scope of works then reserve funding would be considered the most appropriate with potentially monies from leasing being returned to the reserve in time.  It is considered that this potential addition to the scope of works can be discussed in detail during the briefing session for this report and a recommendation be added should Councillors be of the view there is merit to the proposal.

 

IT House

 

Once the building has been completed, the current IT house in Southern Drive will become surplus to Council’s needs.  While not factored into the financial equation, there is an opportunity to commercially lease the property as professional suites (accounting, law firm etc) or alternatively as once discussed, to be set up as a private childcare centre that could assist the Council to be an employer of choice without having to provide such facilities on site or run them.  Alternatively, the Council could sell the building estimated to be worth approximately $500,000 and put these funds back into a reserve.

 

STRATEGIC COMMUNITY OBJECTIVES

 

The City of Busselton’s Civic and Administration Facility project recognises that in order for the organisation to be managed effectively, and deliver the wide range of local government services to achieve positive outcomes for a growing community, expanded and redeveloped Administration facilities are required.

 

The project also aligns with the following community objectives of the City of Busselton Strategic Community plan 2013:

 

Key Goal Area 2.        Well Planned, Vibrant and Active Places;

 

2.3 Infrastructure Assets that are well maintained and responsibly managed to provide for future generations.

 

Key goal area 6 – An organisation that is managed effectively and achieves positive outcomes for the community.

 

RISK ASSESSMENT

 

The potential risks associated with the award of the tender could arise from either issues associated with the process and legislative compliance risks and contract completion risks.

 

Great care has been taken to design a process which mitigates against any compliance and other risks associated with the tender award.  A procurement plan was developed including a detailed expression of interest (EoI) and tender process designed to achieve full legislative compliance and fairness.

 

The EoI process was designed to ensure that the City only invited tenders from companies which were capable of completing the project, with detailed checks of prospective tenderers’ skills and experience and resources.  The documentation with the invitation to tender included very detailed contractual provisions and specifications which aim to ensure that the successful tenderer must complete the the project in the manner, timeframe and overall cost which the City expects.  This documentation has been prepared with substantial legal involvement.

 

CONSULTATION

 

The City of Busselton has consulted with the community on the proposed project through local papers, held two open days and conducted various workshops and briefings with staff and Councillors as the project has progressed.  The Admin Building Working Group has worked hard to keep all staff and Councillors informed, to condition and prepare them for the changes to occur, especially during the construction program.

 

City officers have also been in constant contact with external stakeholders including the architects, engineers, other professional services and quantity surveyors through the design and tender process.

 

OFFICER COMMENT

 

At its meeting on 26 September, 2012, the Council:

·    agreed that the existing building no longer meets current or future requirements and therefore needs redevelopment;

Acceptance of the tender will meet this objective.

·    supported the then working group’s work on establishing future needs for a new Civic and Administration Facility;

·    in view of the Structural Engineer’s report indicating the existing structure to be sound, favoured redevelopment on the current site with a two storey limit;

Further work in this space has enabled the current three storey design to be accommodated, freeing up land for carparking and landscaping.

·    accepted that some form of civic reception space would be provided in a proposed Performing Arts facility, which would complement facilities incorporated into a new Civic and Administration Facility;

Investigations did occur to actually include this facility in this building, however, Council resolved not to proceed with this option.

·    supported the view that the future Civic and Administration Facility needed to be iconic, clearly identifying the location and use as the seat of Local Government;

It is believed that this has been achieved by the working group and the architects with the design.

·    supported a feasibility study being undertaken to identify what sections of the current building could be used in any future redevelopment;

This resulted in retention of the newer two storey section of the current building.

·    favoured the likelihood of any redevelopment being undertaken in stages in order to minimise any disruption to the Council’s operations;

While this is still possible, it is considered by Officers that the least disruptive, and also the most financially advantageous and quickest option, is to completely vacate the site.

·    viewed the first priority to be to provide adequate Administration facilities for the Council’s staff;

This will be achieved with acceptance of the tender and provide the City with both present and future staff accommodation for up to 20 years and possibly longer.

·    accepted the obvious benefits of housing all administrative staff under one roof and that, based on an estimated 3 per cent growth rate, the following staff predictions had been forecast for any proposed new building:

2021------213

2031------280

·    accepted that future parking requirements needed to be estimated and provided for on the existing site or adjacent alternatives;

Revamping of the carparking layout will achieve an additional 19 parking bays on site.

·    supported an investigation being undertaken on likely funding sources, including a review of the Council’s Property Portfolio;

The funding model is now embedded in the City’s Long-term Financial Plan.

·    supported phase two of the project involving the appointment of a suitable Architect to advise the Council on design concepts;

Undertaken as part of the process.

·    viewed that inspection of recently developed or redeveloped Civic Buildings may provide useful ideas for this project.

All Councillors went on a study trip and a further inspection was undertaken by two of the Councillors on the working group, the CEO, his two managers and the architectural team in August 2014. This contributed greatly to the final design.

 

To guide the Working Group through the next phase it was important for some principles to be adopted which clearly spelled out the main aims of the project and what the City was seeking to achieve with each transaction undertaken. These principles are as follows:-

·     To achieve the most attractive, innovative and energy efficient design, within the available budget, which will become the iconic headquarters for the City for the next fifty years.

It is believed that the design is attractive, iconic and innovative.  Where affordable and there is a genuine positive cost/benefit outcome, energy efficiency measures have been included, such as reuse of the existing solar panels, collection of rainwater for reuse, a northern aspect, much more efficient lighting, heating and cooling systems and an integrated building management system.  These initiatives have been achieved within the adopted budget.

·     The successful design will provide comfortable innovative accommodation for both the staff and civic functions under the one common roof by remodelling the existing structures on the current site.

Achieved, including the retention of the newer two storey section of the current building.

·     The new facilities will demonstrate the ability to meet the projected growth requirements for at least the next twenty years, taking full advantage of the latest information technology and presenting the community with a suitable and iconic building as its local government headquarters.

Achieved with the design.

·     The outer visual appearance of the building should take full advantage of the rustic surrounds, depicting the coastal environment of the Geographe Bay Region and be designed to ensure the provision of natural light to work areas.

·     The detailed design must contain detailed and complete information providing a seamless transition through the building phase, minimising any need for contract variations or interpretation disputes.

Significant effort has gone into ensuring the detailed design is as complete and accurate as possible and the CEO is comfortable that the potential for contract variations has been minimised as far as reasonably possible.

·     Where possible the Council will support the use of local contractors in an effort to take maximum advantage of local contributions and cost effectiveness.

The preferred tenderer has nominated a large number of local contractors who will be engaged on the project.  In addition, many of the preferred builder’s own staff and management reside in the Busselton district.

·     Recognise the need to progress the project at a rate which takes advantage of the current economic climate within the building industry and offers local employment opportunities.

It is believed that the City could not have planned for a better time to take advantage of low interest rates on the borrowings and a highly competitive construction environment.

·     Adopt a staging programme which ensures the City’s business continuity is maintained.

While this is still possible, it is considered by Officers that the least disruptive option to business continuity, and also most financially advantageous and quickest, is to completely vacate the site.

 

On this basis, the preferred tenderer has provided as part of their proposal to establish a transportable accommodation facility to be sited at the City’s chosen location.  The preferred tenderer would deliver 27 units including staff accommodation, ablution facilities, kitchens and meeting rooms with basic furnishings such as desks and bookcases, provide some covered walkways and paths between the units and then demobilise at contract completion.  Officers preferred location for this ‘donga city’ is the site purchased on Harris Road for future carparking facilities.  This site is central to other City facilities to be utilised during the building contract, including the former GBTA building where Customer Service, IT and Records will be located to act as the City’s Customer Service Centre and has ready access to services including power, water and sewerage.  The Engineering and Works Services directorate will relocate to the depot and the Community Services business unit to the Geographe Leisure Centre for the duration of the construction program.  Council meetings will likely be conducted from the downstairs function room area of the CRC for the course of the project.

 

The only condition would be that the City would be required to connect to the services at an approximate cost of $55,800 as outlined in attachment “”.The investment of these funds would not be wasted as in the future the City will require power for lighting and potentially water and sewer to the site for carparking or other facilities, so these costs will not be required to be incurred again at that time.

 

The Preferred Tenderer

 

Five builders submitted alternative tenders within the context of their overall tender submissions.  All of the builders proposed a different construction methodology as the common distinction in their alternative tenders, when compared to their non-alternative tenders.

 

As a result of the evaluation panel’s assessment, the tenders were ranked on their combined qualitative and price scores.   On the basis of this evaluation, the decision was made that the two alternative tenders from BGC Construction offer to the City of Busselton both the most advantageous price as well as scoring the highest in the qualitative scoring.

 

On the basis of both alternative tenders that BGC have proposed, the construction is to take place in one stage creating  shorter lead time  and providing enough temporary accommodation for staff (dongas including kitchens, pathways, covered shelters and ablutions) to house all staff currently sited in the existing Administration building.

 

BGC’s alternative tender A did not propose any other changes in construction method and would involve a construction period of 55 weeks at a total cost of $ 19,150,710.

 

BGC’s  alternative tender B proposed a cheaper lightweight concrete construction method which would not affect the form, function or aesthetics of the building,  but would highly expedite construction by using a mixture of precast and hollow core concrete construction methodologies.  The construction would be 48 weeks at a total cost of $18,879,559.

 

In summary, the evaluation panel determined that the final ranking was as follows:

1.    BGC alternative tender B;

2.    BGC alternative tender A.

with both of these tenders representing good value for money options for the City.

 

The tender assessment was carried out by a tender review panel consisting of Councillor Gordon Bleechmore, Manager, Major Projects, Paul Crewe, Contracts and Tendering Officer, Sophia Moore and MCG Architects’ representative Lloyd Pringle.

 

All tenders were found to comply with the terms and conditions and mandatory requirements of the RFT. Accordingly, each tender was scored according to the qualitative criteria endorsed by Council and included in the tender documentation as follows:

 

Criteria Weighting

 

Criteria

Weighting

Relevant Experience

10 %

Key Personnel Skills and Experience

5 %

Tenderer’s Resources

5 %

Demonstrated Understanding

20 %

Price

60 %

 

The net tendered price was scored using the ‘average based scoring method’ recommended by WALGA in the ‘Local Government Purchasing and Tender Guide’.

 

The panel members individually assessed the compliance and qualitative criteria and then applied an average to provide a final rating. The scores were then added together to indicate the rankings for 

each tender. The confidential report attached provides further detail in relation to the relative merits of each of the individual tenderers. Following this evaluation, Officers recommend that BGC Construction should be the preferred tenderer for the reasons outlined in the confidential report.

 

CONCLUSION

 

The tender evaluation panel has completed its assessment in line with the City’s tender process and it is recommended that Council delegates authority to the CEO to award the tender, which would occur after negotiations with BGC Constructions in consultation with Councillor Gordon Bleechmore and the Manager, Major Projects.

 

OPTIONS

 

The Council may consider the following alternate options:

 

1.            The Council choose not to accept the Officer’s Recommendation and award the tender to an alternate tenderer. In the view of the Officers this could result in a tender being awarded to a tenderer that has not presented the “best value for money” offer.

 

2.            The Council may choose not to accept the Officer’s Recommendation and not award the tender. This would mean going back out to tender, resulting in significant delays to the contract award and potential significant delays to the City of Busselton’s Civic and Administration Facility.

 

3.            Not proceed with the redevelopment.

 

TIMELINE FOR IMPLEMENTATION OF OFFICER RECOMMENDATION

 

The award of the tender can be made immediately after the Council has endorsed the Officer’s recommendation.  Subject to finalisation of a number of minor contractual points, the successful tenderer will receive formal written notification within seven days of the resolution.  All unsuccessful tender applicants will also be notified at this time.

 

OFFICER RECOMMENDATION

ABSOLUTE MAJORITY DECISION OF COUNCIL REQUIRED

 

That the Council:

 

1.     Endorses the outcomes of the evaluation panel’s assessment in relation to Tender RFT05/15 for the construction of the Civic and Administration Facility, which has resulted in the two alternative tenders submitted by BGC Construction being ranked as the best for value money tenders.

 

2.     Delegates authority to the CEO, following further negotiations, to nominate a preferred tender from the two BGC Construction alternatives and to award a contract for a finalised lump sum price for the construction of the City of Busselton’s Civic and Administration Facility as a single stage construction method with City staff and elected member activities being relocated and housed offsite for the duration of the construction.

 

3.     Delegates authority to the CEO to approve variations in accordance with Regulation 21A of the Local Government (Functions and General) Regulations limited so as not to exceed the overall project budget.

 

 


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Attachment b

Perspective - Corner Causeway Road and Southern Drive

 


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Attachment c

Perspective - From Causeway Bridge

 


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Attachment d

Perspective - From Causeway Road

 


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Attachment e

Perspective - From Carpark

 


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Attachment f

Perspective - From Vasse River

 


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Attachment g

Perspective - Proposed Additional Floor

 


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Attachment h

Ground Floor Plan

 


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Attachment i

First Floor Plan

 


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Attachment j

Second Floor Plan

 


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Attachment q

Contingency Information

 


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Attachment u

Landscaping Plan