REVIEW OF THE LIFTS BY THE STRATA COMMITTEE

1. On 6 December 2016 the Strata Committee (SC) resolved to conduct a review in 2017 of:

• the need if any for eventual replacement of the lifts;
• the Leary & Partners Capital Works Fund analysis report; and
• the provision to be made in future for the line item “Lifts Replacement” in the Capital Works Fund.

LEGAL OBLIGATIONS OF THE OWNERS CORPORATION

2. The Owners Corporation (i.e. all 162 owners) is required by Section 80 of the Strata Schemes Management Act 2015 (“the Act”) to prepare a plan of anticipated major expenditure to be met from the capital works fund (which used to the called the “sinking fund”), for a 10-year period.
3. Section 80(2) of the Act requires an Owners Corporation  at each AGM to estimate how much money it will need to credit to its capital works fund for actual and expected expenditure, including renewal or replacement of common property (including lifts).
4. In estimating amounts to be credited to the capital works fund, an Owners Corporation is  required by Section 80(5) of the Act to take into account anticipated major expenditure identified in the 10-year plan for the capital works fund.

ACTIONS TAKEN BY PREVIOUS COMMITTEES – LIFTS

5. In 2014 a previous committee commissioned an independent expert report from JCA Lift Consultants concerning the state of our lifts.
6. That report said that:

• Key parts for the lifts such as the controllers and drive systems are no longer being manufactured and spare parts are becoming hard to source;
• The drive systems are obsolete;
• The lifts did not comply with the current lift code. While the new lift code was not itself retrospective, the introduction of the Work Health and Safety Regulation 2011 made the building owners effectively liable to ensure compliance with the current code;
• The lifts did not have dual acting brakes or upward runaway protection;
•  JCA recommended that consideration should be given to upgrading the lifts and that upgrade should include control and drive systems, car door operators and landing door locks, car operating panels, landing buttons, car and hall indication and areas of non-compliance with the Lift Code and the Building Code of Australia.

7. You can read a full copy of that report by clicking this link:             Lift Report by JCA Lift Consultants July 2014

ACTIONS TAKEN BY PREVIOUS COMMITTEES – CAPITAL WORKS  FUND FORECAST

8. In 2015 the Committee commissioned an independent expert report from Leary & Partners to obtain guidance about future expenditure required to properly maintain the building over the next 10 years, including the expenditure required to renew or replace common property (including lifts).

9. The Leary & Partners report was prepared by a quantity surveyor, who conducted inspections of the complex, and who took into account the 2014 JCA report.

10. In relation to lifts, that report projected that all lifts would need to be replaced within 10 years, at a cost of $1.5 million. The report resulted in a spreadsheet which predicted capital expenditure for the following 10 years. The report recommended that $150,000 be collected in levies each year, to build up a fund to eventually replace the lifts.
11. You can read a full copy of the Leary & Partners report by clicking this link:  Leary & Partners Sinking Fund Forecast November 2015.
12. The Leary & Partners report was received and adopted by the 2016 committee. That report formed the  basis for the budget (prepared and adopted by the 2016 committee) which was presented to the AGM held on 5 December 2016.

13. In that budget was a line item of $150,000 for eventual lift replacement.

14. Thus the budget prepared by the 2016 committee complied with section 80 of the Act (see paragraphs 2, 3 and 4 above).

THE ANNUAL GENERAL MEETING HELD ON 5 DECEMBER 2016

15. At the AGM on 5 December 2016 the Owners Corporation adopted the Leary & Partners report as its 10-year plan for capital works expenditure.
16. However the AGM rejected by a majority of votes the budget prepared by the 2016 committee which complied with the Act.
17. Thus the AGM had adopted the 10 year capital works fund contained in the Leary & Partners Report, but then rejected a budget based upon the 10-year plan which the meeting had just adopted.
18. The AGM was adjourned to enable the new Strata Committee to prepare a revised budget.

STRATA COMMITTEE MEETING  HELD ON 6 DECEMBER 2016

18. On 6 December 2016 the Strata Committee (SC) resolved to conduct a review in 2017 of:

• the need if any for eventual replacement of the lifts;
• the Leary & Partners Capital Works Fund analysis report; and
• the provision to be made in future for the line item “Lifts Replacement” in the Capital Works Fund.

STRATA COMMITTEE MEETING  HELD ON 8 DECEMBER 2016

19. On 8 December 2016 the SC resolved to put before a Resumed AGM a revised budget which had a line item of $50,000 for lift replacement (instead of the original figure of $150,000). This figure was a compromise to get a budget approved so that levies could be set, but would not collect enough to replace the lifts on a 10-year timeframe.

RESUMED ANNUAL GENERAL MEETING HELD ON 19 DECEMBER 2016

20. The revised budget was presented to a Resumed AGM held on 19 December 2016. That revised budget contained  a line item of $50,000 for lift replacement. The revised budget was passed at the Resumed AGM.

STRATA COMMITTEE MEETING  HELD ON 16 JANUARY 2017

21. This meeting was attended by two representatives of Thyssen Krupp, our current lift maintenance contractors. They answered questions from SC members and  informed the Committee as follows:

• Otis stopped manufacturing parts for these lifts 5 years ago;
• Replacement parts from China and India were available for some years, but are no longer available;
• If components such as controllers or drives break down, Thyssen can attempt to repair them, or replace them with second hand parts removed from old lifts which have been replaced;
• The stockpile of second hand parts is drying up;
• The controllers in our lifts have not been manufactured for 20 years;
• Our lifts do not comply with the current Lift Code – if they did the lifts would be safer for both technicians and users;
• In Europe the life cycle for these types of lifts is seen as about 15 years – after that time they are replaced;
• Our lifts are about the oldest Otis lifts which Thyssen services;
• The lift cars and the steelwork are fine and could be retained;
• The Owners Corporation should start to develop a program to replace the lifts;
• The time will come when a breakdown may mean that a lift cannot be repaired and will be out of action until a new lift can be installed;
• The time to install a new lift is 6-8 weeks on site;
• The lead time to order new lifts from overseas and have them delivered is about 6 months;
• That means that if a lift breaks down and has to be replaced, the residents in that block/foyer will have no lift and will be using the stairs for about 8 months, if no steps have been taken to renew the lift;
• Thyssen recommends that the Owners Corporation start a lift replacement program as soon as financially possible.
• There are cost savings if lifts are replaced two at a time;
• Thyssen can prepare indicative costings and options for programmed replacement.

22. The SC resolved to request Thyssen to prepare indicative costings and options for programmed replacement, to be considered at the next SC Meeting to be held on 13 February 2017.

STRATA COMMITTEE MEETING HELD ON 13 FEBRUARY 2017

23. Thyssen did not provide their report before the meeting.
24. The Commitee resolved as follows:

• The Committee has come to the conclusion that the lifts do require replacement or refurbishment or modernisation, and the Committee will now consider what should be done in the light of that finding;
• All members should make their own enquiries about the lifts and present any information at the next meeting;
• The whole Committee should be involved in the review, and a subcommittee should not be formed.

STRATA COMMITTEE MEETING ON 10 APRIL 2017

25. The Committee resolved to commission JCA Lift Consultants to provide a written report upon the following issues:

• What are the components of the existing lifts that are expected to be difficult or impossible to replace in the future?
• If the lifts are to be replaced or refurbished or modernised, what are the likely time frames for: obtaining quotes by tender; ordering;  delivery; installation?
• If the lifts are to be replaced or refurbished or modernised, what type of lifts would be best suited to Pacific Park?
• If the lifts are to be replaced or refurbished or modernised, what are the advantages and disadvantages of replacing: One lift per year; Two lifts per year; All lifts in sequence (or in pairs).
• What advantages and disadvantages would there be in relation to the maintenance of the modernised lifts? Please deal with the different types of lifts discussed above.
• What role could JCA play in: Running a tender and making a recommendation for replacement or refurbishment; Supervising any successful tenderer; What would be the costs of JCA’s involvement?

26. The Committee also resolved that at the next meeting on 8 May 2017 it will make a decision to replace or refurbish or modernise the lifts. That meeting will be attended by Colin Boswarva from JCA Lift Consultants, who will answer questions about his report or the lifts generally.
27. You can read a copy of the lift report obtained by clicking this link: JCA Lift Report dated 2 May 2017.

STRATA COMMITTEE MEETING ON 8 MAY 2017

28. Colin Boswarva from JCA Lift Consultants attended the meting and answered questions from Committee members as follows:

• Full replacement of lifts, rather than refurbishment, is more common nowadays – the costs are often similar;
• If you only replace one or two lifts in a year, and defer the rest, one disadvantage is that you may not end up with the same lift contractor or the same equipment for any later lifts;
• Whatever brand of lifts is installed should be able to be maintained by other companies;
• Any tender should ask for two prices – replacement and refurbishment;
• The existing landing doors and frames may or may not fit a new system;
• There will be a 12 month defect period on any installation;
• After 12 months each new lift will need a comprehensive maintenance agreement.

29. The Committee  resolved (unanimously) to commission Colin Boswarva from JCA Lift Consultants to prepare and conduct a tender for replacement or refurbishment of all 6 lifts, in accordance with the JCA Proposal For Services dated 2 May 2017.
30. The Committee  resolved (by 4-1) to commission Colin Boswarva from JCA Lift Consultants to prepare and conduct a tender for replacement or refurbishment  lifts 2 and 5 only, in accordance with the JCA Proposal For Services dated 2 May 2017.
31. The Committee resolved that at the next meeting there will be discussion of:

• the 10-year capital works forecast; and
• options for payment for any replacement or refurbishment of the lifts i.e. borrowing and increasing levies vs a special levy.

STRATA COMMITTEE MEETING ON 10 JULY 2017

32. The Committee noted that upgrade/replacement works had been tendered and a site walk through was held on Tuesday 20 June 2017. There will then be  a 4-5 week tendering period and tenders will close. It will then take 2-3 weeks for JCA Lift Consultants to review the tenders and report to the Committee. Based on this, the tender assessment should be completed in late July to early August.

STRATA COMMITTEE MEETING ON 7 AUGUST 2017

33. The Committee considered the report of JCA Lift Consultants dated 1 August 2017. You can read a copy of the report by clicking this link: JCA Report 1 August 2017.
34. The Committee resolved to present a Motion to the AGM to engage Schindler Lifts to commence in 2018 the replacement of 6 lifts in accordance with the tender summarised in the JCA Report.

35. The Committee also resolved to present a Motion to the AGM to fund this by a special levy to be spread over 8 quarters.

STRATA COMMITTEE MEETING ON 24 OCTOBER 2017

36. The Committee resolved to adopt a draft budget to be presented to the AGM on 4 December 2017. The draft budget makes provision for a special levy, to be spread over 8 quarters, to fund replacement of the lifts.

INFORMATION NIGHT HELD ON 21 NOVEMBER 2017

37. You can download the slides from this night by clicking on this link: Information Night Slides.

ANNUAL GENERAL MEETING ON 4 DECEMBER 2017

38. The Owners Corporation resolved to replace the lifts and pay for the work by a special levy – see Minutes of AGM and subsequent 2018 minutes of the Strata Committee