Eastlake and Tadema – In flat heating and hot water works (contract T262)
Open meeting – Wednesday 16 November2016
Lorna Whitehorn (LW), resident engagement and opportunities manager
John Hayden (JH), M&E team leader
Frankie Collopy (FC), mechanical engineer
Ray Taylor (RT), lessee services team leader
Lindsay Brian (LB), engagement and consultation coordinator
Note: A resident was audio recording the meeting.
Introduction
The 4 options were reviewed and it was agreed to proceed with the original option with some amendments to the scope of work, which have been outlined in the Options Appraisal (attached) and letter dated 27 October 2016. The main savings include the change of heat interface unit and the reduction of contract duration from 52 weeks to 32.
Q. We don’t feel that you have explored all the options, what about part electric and part gas?
A. CWH did not consider these to be viable options as while this may appear to be a cost effective answer for some, it is neither an option open to the council to unilaterally decommission a communal system and replace with a mixed in flat alternative (as this would require a lease variation of all leases), nor is it an equitable answer for all residents as some residents would be forced to have electric heating (a more costly alternative for running costs, and one which negatively effects a properties energy performance certificate which could affect the value of the flat.
Q. Which tariffs were used to calculate the 30 year fuel costs?
A. The fuel costs were calculated using the basic rate for energy consumption.
Q. Which flats were surveyed and when did this take place?
A. As well as properties accessed by previous designers and consultants, CityWest Homes surveyed 15 properties in 2015 and 10 in 2016.
Q. In response to the observations we were told only a few flats were surveyed in order to allow for the design of works for tender and that all flats will be surveyed before works commence. How have the costs been obtained and decisions made on options if the scale of the work is not known?
A. The properties surveyed confirmedwhat CityWest Homes already know. Further clarification will also be gained from the contractor surveys, if these highlight any works not required then the cost can be adjusted accordingly and in line with the contract.
Q. How many individual boilers can run off the current system?
A. The existing gas infrastructure is not sufficient to maintain 108 individual boilers for each resident. As stated above and detailed in the cost option report, the gas supply for the block would need to be upgraded for two reasons
- The existing gas loading running through the block cannot provide the required demand for 108 boilers
- The existing gas pipe work runs are internal and would need to be replaced externally on the facade of the block.
Although National Grid estimated that 20 properties could be removed from the communal system and connected to the existing gas supply, the council cannot discharge its repairing obligations with piece meal alternatives for individual properties for the following reasons:
- Were the council to agree to 20 properties disconnecting and the reaming properties remaining on the communal system, notwithstanding the practical and ethical difficulties in assessing who is permitted to disconnect and who has to stay connected, the council would both under-recover on the cost of repairs (the council cannot recover the cost of repairs from just the connected lessees), and running costs would increase for the remaining users.
- Should the council choose this option with a view to replacing the communal system with a mixture of in flat solutions (gas and electric), again notwithstanding the practical and ethical difficulties in deciding who is permitted a gas boiler, and who is forced to use electric, the council does not have the power under the lease to unilaterally make this decision and decommission the communal system. In order to do this, the council would require at least 75% of all lessees supporting and no more than 10% opposing a lease variation.
- Finally, the council cannot force some lessee to accept electric heating while allowing others to install their own gas boilers. This would be detrimental to residents forced to use electric (leading to higher consumption costs and detrimental to their energy performance of their flat).
Q. Why can’t I have an individual boiler installed as others have done?
A. The current policy is not to allow disconnection from the communal system as it compromises the systems performance and will not be as cost effective supplying fewer residents.There are a number of reasons why disconnection from our communal systems is not permitted.
Notwithstanding the legal implications, there are a number of technical and financial issues which make ad hoc disconnection difficult and would be likely to have a detrimental impact on the operational efficiency and cost effectiveness of the communal heating and hot water system.
Our communal heating and hot water systems are designed with pipes running from basements through individual flats, and from floor to floor. The design of the system and intricate nature of the pipe work makes restricting supply to individual properties difficult and/or expensive.
Communal systems are designed as integral systems, and are at their most efficient when operated as such. If individual flats were ‘capped off’ using valves and by-passes, this may impact on the balance of the system and its overall efficiency. Because of the design of the systems, pumps installed may need to be replaced to avoid over pumping caused by this imbalance.
If an increasing number of properties disconnected from communal systems it would be increasingly difficult to deal with the problem of imbalance. The block gas supply will not currently be able to sustain the supply to all the flats if they were all individual systems.
Equally, there is a risk that by restricting supply to individual properties corrosion may result in the ‘dead leg’ of the system or build-up of micro bacterial matter.
There would also be a consequential cost increase for residents who remain connected, the total expenditure being shared between fewer users. Increased costs may lead to further requests to come off communal systems, potentially leading to systems being uneconomic to operate.
Q. Individual boilers were offered to residents in the 1980’s, what is the difference between then and now?
A. We are aware that some properties were given permission to come off the communal system historically; however CWH have no records of individual boilers being offered to residents of Westminster in the 1980’s. There was a policy for converting electrically heated homes with no access to communal systems gas boilers in the 80’s as an alternative to expensive electric heating.
However, the current longstanding policy is not to allow disconnection from the communal system as it compromises the systems performance and will not be as cost effective supplying fewer residents. Due to the high tender we sought an independent report to look at the option of installing individual systems which concluded that replacement of the communal system would be more beneficial to residents.
Q. Why was the work not done 10 years ago?
A. The decision on whether to repair, replace and maintain the systems is made after careful consideration of a range of factors. The decision takes into account the age, repair history and failures and complaints.
Q. Do the leaseholders that are not on the system have to pay a percentage?
A. No. Only those on the communal system will pay their lease percentage of the costs. Those with individual systems are responsible for their own apparatus and have not been charged for the communal system to date. All those properties connected to the cold water pipe system will be charged their proportion of these works. The Housing Revenue Account will pick up the costs that would have been recharged to those off the system therefore no lessee will pay extra.
Q. Do you check individual leaseholder terms?
A. Yes we do check each individual lease when calculating individual lessee liabilities.
Q. Do council tax payers pay for the council tenant’s share of the bill?
A. For clarification, council tax receipts are not used for local authority housing, and we can confirm that no council tax payer is contributing towards the costs of this scheme through their council tax. The councils proportion of the works cost (covering the tenant share) come from the Housing Revenue Account, and comprises tenants’ rents.
Q. What is the percentage of tenant to leaseholder?
Eastlake 54 flats –17 tenants (31%), 37 leaseholders (69%)
Tadema 54 flats – 20 tenants (37%), 34 leaseholders (63%)
Q. Could we explore the possibility of enfranchisement?
A. For enfranchisement to take place at least two thirds of the building will need be sold on long leases and at least 50% of qualifying lease holders would need to participate.
NOTE: LW apologises for providing the wrong percentages during the meeting.
Q. Does the council have a percentage liability for each council flat dependant on the number of bed spaces in that flat or is it a set rate?
A. Each property is allocated a bed space percentage, so it’s worked out the same way as the lessee liability.
Q. The percentage each flat is being asked to pay is very unfair, the flat sizes do not vary by much and yet the bills are not reflective of this.
A. The principle of a lease percentage is to ensure that those who benefit from works (the lessees) pay and that the freeholder is able to recover 100% of its costs. There are a number of ways to apportion service charges, and the standard method used by Westminster is the bed space method (this method roughly translates to the optimum number of inhabitants within a flat and is therefore indicative of the footfall or proportional usage of the whole building by those within a dwelling). While this method works well for example on roof repairs, it can appear unfair when there are individual elements a flat can count such as radiators or windows. Unfortunately, because of the early leases within theXXXX
Q. Why is electric not an option?
A. We have considered in-flat electrical systems as detailed within the attached options appraisal, and hope that this explains why we do not think this is a viable option despite its initial cost savings. Because the council owns properties elsewhere with these types of systems we have used actual costs to inform our running cost analysis, and this shows that yes, the running costs for electric are significantly greater, meaning that over the life of the system, this is more costly.
Q. Leaving the old boilers and pipes in place and not increasing the cold water pressure will keep the cost down, as will individual flat radiator replacement. Quotes received show this is not difficult and comparatively very affordable.
The suggestion that much of the old system is retained has been looked at in the form of a ‘do nothing’ option. This too is set out in the options appraisal attached. As you can see the main reason this is not considered to be viable is because of the damage the old pipes do to new equipment, vastly foreshortening the new equipment’s serviceable life.
Q. When will the windows be replaced?
A. Waiting for clarification from Westminster City Council on the community benefit fund.
Q. Will we be able to control the heat in our flats?
A. Yesand you will also have instant hot water.
Q. How are the heating and hot water charges calculated?
A. Heating and Hot Water charges are calculated based on the number of habitable rooms in each flat and isn’t charged based on individual lease percentages.
Q. Could it be the pilot project for the new term contractor and would that make it cheaper?
A. The new term contracts transfer the responsibility for design and scheduling of works on to the term contractors rather than separate individual consultant appointments commissioned by CityWest Homes. Eastlake and Tadema has been substantially designed and this element of the project costs including any CityWest Homes staff costs may become redundant or duplicated within any new instruction. Whilst some costs could be omitted these would be limited to the amounts priced by the contractors at tender stage and may not be representative to those accrued on the project to date.
The term contracts are programmed for award mid-2017 and we have scheduled approximately nine months from the contractors receipt of a CityWest Homes Client Brief to the contractor to prepare a strategy, design and price for works before they can commence on site meaning the earliest Eastlake and Tadema could start under the new arrangements is Spring 2018. Tender prices themselves are difficult to predict in the present environment particularly taking into account our exit from the European Union but nonetheless prices have generally been increasing by 4% each year so there is a good chance prices will increase by at least 6% over this time however if the pound continues to devalue material prices may well increase beyond normal forecasts.
In the event that the project were delayed there is potential for lower CityWest Homes management costs for the period the works are on site however the redundant costs from a redesign/or novated design together with the pre-contract fees incurred during consultation and procurement would be prohibit this approach. It is our opinion that proceeding with the project in its present format is the most economical and less risky strategy.
Q. When will the contract be signed?
A.The contract and letter of acceptance was issued to the Solicitors in early November 2016.
Q. Will there be a problem with the water like there was on Wharncliffe Gardens?
A. No. The water main issue on Wharncliffe was due to the fact that the heating and hot water pipework was buried in the ground and corroded over the last 30 years.
Q. What is the start date?
A. December 2016 with a 10 week lead in to carry out in dwelling surveys and soft set up prior to Christmas with a site compound and in-flat works commencing in February / March 2017 once the contractor has completed the surveys.
Q. Will there be scaffolding on the blocks?
A. No, the contractor will use cherry pickers, if necessary.
Q. Do you know the programme of work?
A. We will write to you in January with the full programme of work and outlining the access requirements.
Q. How long will you be in working in my flat?
A. 1 half day to core drill the openings in the cylinder cupboard and fire stop the openings, and 1 day to install and isolate the new service. The installation of the distribution pipe work, the HIU, pipe work, radiators, electrics and controller will be 1 to 2 days (depending on property size) to install and a further day for making good.
There will be flexibility with appointments and we will try our best to arrange appointments that best suit the resident.
The days are not required to be consecutive.
Q. How long will I be without hot water?
A. For a maximum of one working day (12 hours) of the install, which you will have advance notice of. It will not affect your heating that will run normally.
Q. Will the in dwelling shower pumps be removed?
A. Yes, you will get on average of 18 litres of hot water a minute from the Heat interface unit. Any in dwelling booster pumps will be removed by the contractor and returned to the resident.
Q. Will the pipe work be boxed in?
A. During the individual flat surveys the Contractor shall establish where existing pipework is boxed in and mark this on their working drawings.Where existing pipework is boxed in the Contractor shall be required to encase the new pipework in MDF boxing. This shall be to provide a neat and tidy finish that can be fully decorated to match the residents existing décor.
Where access panels are required for venting or draining purposes, the access panels shall be a preparatory unit supplied by the manufacturer.
The pipework shall be secured to the surface with twin pipe brackets (casing is not permitted for primary and lateral mains).
Upon completion of all internal casing work, a continuous bead of white decorators caulk shall be run between the casing and the wall finish.
Q. Who is responsible for any damage to carpets etc. during the work?
A. A photographic condition survey will be carried out and any damage to property will be covered by the contractor.
Q. Can I view the radiators?
A. A sample of the radiators and HIU will be available for residents to view both online and at a drop in that will be organised in January 2017.