It’s 1307 days since the last Daylesford Cinema screening in the Rex. ‘ Victoria and Abdul’ screened on the 22nd October, 2017. That’s more than three and a half years ago.
The Council bought the Rex on Vincent Street in 2016 for $6.3 million. It planned to turn it into a hub to include Council offices, a library, auditorium and cinema and community spaces.
Nearly four years later, this week’s Council meeting received yet another report from Council officers reporting no further progress on completing the building works at the Rex and pointing out that again, costs for the project are likely to increase.
Again, the Officer’s report to Council reported that the builder, Hutchinson, has not commenced work, despite being issued with a notice to proceed in early January.
Again there may be further costs that are not yet covered by the budget.
The story so far
The project first came to a grinding halt in 2018. Costs had blown out past the anticipated $1 million to renovate the building. Required planning permits had not been applied for. Murals worth $30,000 had been commissioned from David Bromley without consulting Council or the public art panel. The then Chief Executive, Aaron van Egmond resigned.
Council conducted an investigation and then referred the matter to the Victorian Local Government Inspectorate in 2018.
The new Chief Executive Officer, Evan King, put in place a full review of the project and a new budget estimate for the building works for the project of $6.3 million was approved by Council in February 2020 – more than 6 times the original estimates for the renovations.
The budget blew out again to $7.1 million in September last year when a number of new problems and additions were identified. Consultant costs were then revised to $2.5 million and building costs $4.6 million.
Following a public tender, Hutchinson Builders won the building contract in September. But building works were again delayed during Covid.
A notice to commence work was issued to Hutchinson in early January this year. But Hutchinson did not commence work and raised a number of queries about the conditions of the site. Council officers then entered into negotiations with Hutchinson to try resolve these issues.
Despite four months of negotiation, they have not been resolved.
Where to now
The overall Council budget this year is around $40 million. The Rex is Council’s most significant ongoing project.
At best the Rex might be completed in October this year, but it looks increasingly likely that it will be delayed until sometime in 2022 – well over 4 years after the Rex closed. There is a chance that the works will not proceed at all. The building contract has a sunset clause that could allow either party to walk away after July the 5th. If that happens, the project will be delayed indefinitely.
Officers have been required to find savings to offset any additional costs by Council. Savings of $0.2 million have already been committed to address further issues that have been identified with the building. These include fixing faulty roofing and walls, upgrading drainage and ensuring adequate acoustic treatment of offices and the cinema.
It seems inevitable costs will blow out again and that further savings will have to be found, or Council will have to allocate yet more funding for the project.
Only one councillor remains from the Council which made the decision to embark on the Rex project. Six new councillors were elected at the last local government election. Since the original decision, one Chief Executive has left under a cloud and another left before building recommenced. A third CEO has now been appointed.
The Minister, Shaun Leane, has responsibility for ensuring good governance by local Councils. The long awaited report of the Local Government Inspectorate is yet to be released after a considerable delay. It is now so late it is unlikely to achieve anything.
The current Council and recently appointed CEO may not have created the problems with the Rex project, but they seem unable to sort them out either.
In February, Council decided that the Project Control Group chaired by the CEO should provide regular progress reports to Council. There have now been three almost identical 10 page reports (March, April, May) with no resolution of the problem.
The Mayor, Cr Lesley Hewitt said, following this week’s Council meeting, “We fully understand the frustrations of the community with this project. We have asked Council officers to facilitate a workshop where Councillors can be advised of the implications, financial and non-financial, of exploring all options when it comes to the project, including ceasing it. It’s important we explore the legal implications of any future decisions.”