Executive
Report
Report to
EXECUTIVE
Earliest date for
decision:
8th JUNE 2011
Decision
number:
3. BUS AND TRAM SHELTER REPLACEMENT
1.0
Matter for consideration:
1.1
The renewal and replacement of time expired shelters on the bus and tram
network to provide passengers with the necessary protection from the
elements through the use of Prudential Borrowing funded by advertising
income from use of the new shelters.
2.0
Recommendation(s):
2.1
To approve the plan to renew or refurbish existing bus shelters through the
use of Prudential Borrowing
2.2
To agree the Prudential Borrowing requirements outlined in the financial
implications
2.3
To authorise the Director of Resources to negotiate and enter into a licence
agreement with Blackpool Transport Services regarding advertising rights at
bus and tram shelter sites.
3.0
Category grouping:
4.0
Corporate Performance Plan Objective :
Corporate/Strategic
Goal 2: Develop a Safe, Clean and Pleasant Place to Live, Work and Visit
5.0
Information
5.1
There are 839 bus stops and 44 tram stops in Blackpool of these 232 are
provided at key locations to ensure waiting passengers are protected from the
elements and encourage public transport use. Provision of shelters is an
integral part of providing a quality bus and tram network and ensuring
passengers can use the network in reasonable comfort. Many of the existing
shelters are in very poor condition and require replacement; others are
capable of being refurbished where this is more cost effective. The Council
has a commitment to the provision of the best quality public transport
infrastructure it can provide to encourage the use of buses and trams as
sustainable modes of transport and the shelters form an important part of this
network.
5.2
The current ownership of the shelters is divided between Blackpool Transport
Services and the Council, with different arrangements in place for cleaning
and maintenance, leading to different standards of service to bus and tram
users across the network. The split ownership also means that the efficiencies
in maintenance and advertising potential are not being maximised.
5.3
The shelters owned by Blackpool Transport Services form part a contract
signed in 1996 with Blackpool Transport Services (BTS) for the provision of
108 advertising shelters (90 bus and 18 tram) and 46 non advertising shelters
at locations across Blackpool in return for the advertising rights at certain sites.
The current contractual arrangements expired at the end of March 2011. This
existing shelter stock is at least 15 years old and whilst they have some useful
residual life most are in need of refurbishment to extend their useful
operational life and continue to provide a quality facility for bus and tram users.
Under the current contractual arrangement Blackpool Transport Services are
responsible for cleaning and maintenance of these shelters and would be
required to remove them when the contract expires unless a suitable
alternative is available to maximise the residual life of shelters and provide for
new stock where needed.
5.4
All existing tram shelters currently under this agreement will be replaced with
new shelters provided as part of the upgrade to the tramway.
5.5
In addition to the shelters covered by the agreement the Council own 40
recently installed modern units and 38 older bus shelters in varying poor states
of repair. These are cleaned and maintained by the council. The cleaning and
maintenance of the council owned shelter stock is currently funded by monies
paid to the council by Blackpool Transport Services under the 1996 contract,
but this is insufficient to allow for any planned replacement programme.
5.6
Without some new investment and an ongoing maintenance scheme there will
be no way of maintaining the shelters which form an integral part of the bus
and tram network after the end of March 2011, and this will lead to the removal
of many shelters as they become life expired and unsafe.
5.7
In order to secure the provision of good quality shelter stock for the travelling
public in Blackpool, it is proposed to bring all bus and tram shelters and
associated advertising units and infrastructure into the single ownership of the
Council. Negotiations have been undertaken with Blackpool Transport
Services to transfer all shelters and infrastructure in their ownership to the
council for a token sum. The Council would thus be responsible for all
provision, cleaning and maintenance of all sites but would hold all rights with
regard to the shelters, associated advertising units and infrastructure.
5.8
Once the shelter network is in a single ownership with the associated
advertising rights a cost efficient and comprehensive programme to replace
and renew shelters can be developed alongside a maintenance schedule that
can be funded by the advertising revenue from shelter sites.
5.9
The cost of the new shelters and refurbishment of existing ones will be met by
prudentially borrowing over a 12 year period against anticipated revenue from
advertising at the shelter sites. Financial records are available from Blackpool
Transport Services which demonstrate the anticipated level of revenue
generation from the existing sites. In addition some 20 new advertising sites
have been identified and agreed the Council’s Planning division which will
further enhance the potential revenue generation. The projected income
allows for all the costs associated with bringing the stock back up to an
acceptable standard with a significantly enhanced life and will also fund the
necessary maintenance to keep the network of shelters in good condition for
bus and tram users in the future.
5.10
The Council would enter into a negotiated licence agreement with Blackpool
Transport Services to manage the advertising rights and revenue generation
on behalf of the Council and pay to the Council sums guaranteed to fund the
councils costs with regard to the borrowing as well as ongoing annual costs for
maintenance and cleaning of shelters, and all other related costs falling to the
council. This approach ensures that a single network is provided to the level of
quality that bus and tram users will expect in the most cost efficient way.
5.11
Does the information submitted include any exempt information?
6.0
Legal considerations:
6.1
It will be necessary for the Head of Legal Services to enter into a suitable
licence agreement with Blackpool Transport Services to manage the
advertising rights and revenue generation.
7.0
Personnel considerations:
7.1
None
NO
8.0
Financial considerations:
8.1
The proposal is based on prudential borrowing of £1,077,000 against
anticipated revenue generation guaranteed by a licence agreement in order to
carry out the replacement and refurbishment works set out above. The
revenue generation has been assessed on previous revenue figures giving a
robust platform sufficient to cover the costs of borrowing and ongoing annual
costs for maintenance and cleaning of shelters, and all other related costs
falling to the council. Blackpool Transport Services is in addition willing to
guarantee funding to meet these Council costs under the terms of a licence
agreement. This approach ensures that a decent quality network of shelters
can be installed and maintained without adding pressure to the Councils
revenue budget.
9.0
Performance management considerations:
9.1
The provision of quality public transport infrastructure is consistent with the
Council’s Local Transport Plan and Goals 1 and 2 of the Sustainable
Community Strategy.
10.0
Risk management considerations:
10.1
Risk Mitigation Revenue generation from advertising fails to reach projected
levels. Historical records for revenue generation from the existing sites give a
strong level of confidence in future projections. In addition 20 additional sites
have been identified and included within the funding model which further
mitigates the risk of drop in advertising revenue. Blackpool Transport Services
has agreed to take the risks with regard to revenue falling below the level
necessary to fund the council’s costs. Shelter stock deteriorates more quickly
than anticipated and does not survive the life of the Prudential Borrowing.
Existing shelters have all been surveyed and condition of the stock is well
known. The residual life of all shelters it is proposed to refurbish has been
assessed and the figures used to inform the borrowing and investment model
The Council has carried out the experimental refurbishment of 5 sites which
have been in place for 12 months and are holding up well in terms of
deterioration. Costs in relation to cleaning, maintenance and other council
costs are greater than predicted in the financial model. Costs are based on
known historical costs and the budgets included in the model are conservative
and adequate to deliver the standard of service required.
11.0
Relevant Officer:
11.1
John Donnellon, Assistant Director Built Environment
12.0
Relevant Cabinet Member
12.1
Councillor F. Jackson, Streets and Transport
13.0
Consultation undertaken:
13.1
None
14.0
Background papers:
14.1
None
15.0
Key decision information:
15.1
Is this a key decision?
15.2
If so, Forward Plan reference number:
15.3
If a key decision, is the decision required in less than five days?
15.4
If yes, please describe the reason for urgency:
16.0
Reasons for recommendation(s):
16.1
The proposal represents the most prudent and cost effective way of maintaining
the councils bus and tram shelter provision to the standard demanded by the users
without recourse to the Councils revenue budget
16.2a
Is the recommendation contrary to a plan or strategy adopted or
approved by the Council?
16.2b
Is the recommendation in accordance with the Council’s
approved budget?
16.3
Other alternative options to be considered:
YES
7/2011
NO
NO
YES
None
17.0
Call-in information:
17.1
This decision will be subject to the call in process.
Are there any grounds for urgency which would cause this
decision to be exempt from the call-in process?
NO
17.2
If yes, please give reason:
TO BE COMPLETED BY THE PROPER OFFICER
18.0 Scrutiny Committee Chairman (where appropriate):
Date informed:
31st MAY 2011
19.0 Declarations of interest (if applicable):
19.1
20.0 Executive decision:
20.1
20.2 Date:
20.3 Reason(s) for decision:
21.0 Date of publication:
22.0 Call-in:
22.1
23.0 Notes:
23.1
Date approved:
N/A