ROYAL PINES SECURITY REVIEW - REPORT TO PBC Committee Statement This report represents the consensus findings of a majority of 4 out of 5 of the Security Sub Committee and is prepared after completing an extensive analysis of 3 comparable residential communities and receiving recommendations from 7 Professional Security Service providers. The Committees goal has been to provide a quantitative evidence based report that eliminates concerns our recommendations reflect personal preferences or unsubstantiated perceptions of what 605 Royal Pines residents may want. To support this approach all data collected is available for the PBC to review. Whilst some residents are passionate and genuine about what they feel is best Security for the community, we saw it as impractical and undesirable for this review and report to just be a compilation of personal thoughts and desires. We want the residents to know that the committee has looked at the latest best practice security alternatives in the market, and is able to present solutions that can provide enhanced and better value security for Royal pines residents, if the majority of all 605 lot owners elect to change what they have. We acknowledge that the fifth member of the committee has decided to table an individual report that reflects their own views on security for Royal Pines. He advised the committee that whilst he did not dispute the facts in this report, he did not see the recommendations we were presenting as being accepted. A) Introduction and Reason for Review The PBC is responsible for residential security at Royal Pines. In budget year 2014/2015 security and mail delivery costs are $583,071 (GST inclusive), which is approximately 28% of the PBC total budget. This equates to $964 for each of 605 lot owners. Conservative projections with 3% p.a. increases show that Royal Pines PBC will spend $3.096 million over 5 years and $6.685 million over 10 years, to provide the current level of security and access control. The Original East Side residential precinct is over 20 years old and fundamentally still has the original security systems in place. It was reported to the committee that there had never been a review of security. A surprising and concerning fact for some on the committee! Committees such as the PBC have an obligation to owners to review the services being provided to ensure they are relevant and a requirement of the majority, and equitable for all owners. As is prudent practice in successful businesses, large line item Body Corporate budgeted expenditures, such as being incurred for Security, should also be reviewed from time to time. In the case of Body Corporate Reviews, the main aim is to objectively investigate and compare current systems, services and costs against newer and improved solutions. This determines if current or enhanced services can be provided more cost effectively to deliver better value for owners, or if the current systems are best to remain as is. The current Royal Pines PBC is to be congratulated on deciding that in the interests of all owners and as part of their PBC responsibilities, there was a need to undertake a review of the current security arrangements. They elected to form a Security Sub-Committee to complete the task.
B) The Review Process The Security Sub-Committee is made up of lot owners appointed by the PBC. No budget was allocated for conducting this review and all committee representatives have given their time freely to attend briefings, inspections and meetings as part of the review. No committee member had a broad previous or current security industry background. It would therefore have been easy and understandable to quickly have a committee exhibiting bias and polarization with either strong views for or against what we currently have, and advocating no or minimal change versus radical change. History tends to show that if there is a knowledge vacuum within a committee, that s when personal agendas can emerge to fill the void. Those personal agendas can become serious distractions and impediments to achieving the important constructive and objective outcomes the committee was tasked to achieve. Whilst counter productive opinions did emerge at some points in the review process the committee adopted the following Strategic Actions to gain knowledge and try to ensure a high degree of objectiveness, open mindedness and latest ideas were able to be explored, canvassed and tabled in this review. In this regard the following 2 Strategies were undertaken: 1) Comparing Royal Pines with other Gated Communities On-site visits were undertaken to Sanctuary Cove, Hope Island and Surfers Waters. These are all gated communities like Royal Pines and incorporate different approaches to access, security and monitoring services. All have evolved to where they are now, having adopted changes and continuous improvement plans that incorporate new technology that residents have progressively assessed and endorsed to be more suitable and desirable in meeting their needs. For a variety of reasons none of these communities have the same systems in place that were originally installed when the Residential resorts opened. The Royal Pines Security committee received detailed presentations and briefings on how each community managed its Security Services. We were free to ask any question we liked so we ended up with sufficient accurate information to be able to compare with Royal Pines and provide briefings on a range of alternative options other gated communities had in place for security. 2) Invite Security Experts to review current arrangements at Royal Pines and provide initial Expert Submissions and Recommendations. Eight Expert Security Service providers were briefed and invited to make submissions and initial recommendations as per a standard briefing document. (See attached briefing document). One invitee in RACV Resorts declined to respond. Of the remainder, site inspections were undertaken by most of the seven Service Providers. Each company presented their recommendations at meetings with the Security Committee. Each presentation concluded with a Q&A session to ensure all committee members understood the reasons behind the submission and recommendations.
C) Review of Submissions 1) Introduction Each Company received the same briefing document but may have received slightly different verbal briefings from different Committee members. All data submitted by the Security Experts is available for scrutiny and the submission summary is a compilation of the common recommendations from all the experts. Nothing submitted is being withheld, so as to ensure total transparency and the removal of any potential vested interest bias, by data censorship. 2) Submission Summary Common Findings for 3 Gated Communities Inspected. *All had Non-Manned Gatehouses *All had automated access control for residents, visitors and tradesmen/contractors. *All had more Security Guard patrols. *All had Newer Cameras and dedicated 24/7 monitoring centres, except for Surfers Waters which records from Camera s, and footage is randomly or as required monitored by the facilities manager. *All had dedicated and accredited alarm-monitoring facilities available to them, except Surfers Waters, where residents made their own alarm monitoring arrangements. Common Aspects of Expert Submissions and Recommendations received. *All advised that current Gatehouse monitoring does not comply with latest Industry accreditation and standards requirements. *All recommended that alarm monitoring should be outsourced to an approved monitoring facility. If this occurred individual owners would decide if they needed alarm monitoring and may elect to be connected to the Royal Pines recommended Service Provider on a user pays basis. They would also be free to make their own arrangements with their own provider, if they did not want to use the Royal Pines approved supplier. The benefits of using the PBC approved supplier would be integration with security patrols. *Six of the seven submissions recommended NON-manned gatehouses and automated access control for all residents, visitors, and tradesmen/contractors. Most also identified that the current western side remote access points need to be upgraded. *The incumbent Service Provider was the only one recommending staying with manned gatehouses. *The same six of the seven submissions recommended one or two permanent 24/7 guard patrols as more effective security than a permanently manned gatehouse. *Six of the seven suggested one full time patrolling guard would provide a more visible and effective security presence than the current situation of guard s predominately being in the Gatehouses. *Six stated that going to Non Manned gatehouses required access gates to be upgraded to facilitate automated access, new access cameras and intercoms, and boom gates to also be installed to prevent tailgating. *All respondents stated there was a requirement for regular maintenance agreements to be put security equipment. in place for all
*All stated varying degrees of requirement for Cameras to be upgraded and once the basics were in place for automated access control, it would be prudent for additional camera installations to be done on a progressive upgrade program over a number of years. *Six of the seven stated that the entry gate cameras would need to be upgraded immediately if a decision is made to go to unmanned gatehouses, to enable remote monitoring and resolution of access problems via the monitoring facility or the permanent patrolling guard. Other Considerations *The current security and duress monitoring in place for the East is not available for Western residents. * This is an inequitable arrangement that would be resolved by having all monitoring outsourced to an approved monitoring facility on a user pays basis. *It would not seem practical to contemplate trying to provide the same alarm monitoring for Western residents via the non-accredited sub standard Eastern gatehouse monitoring facility. *Security on the West and an additional contractor on the East currently do mail deliveries. It is estimated the cost is an additional $25,000 per year for the East side contractor. In the short term it would be feasible for the current mail delivery arrangements to continue with some changes to Post mail drop off arrangements. *However, Australia Post will do deliveries if streets on the East are named and accessible mailboxes are put in place. On the West, streets are already named and lots identified,(see Google Maps) and once accessible mail boxes are in place Post would commence deliveries. The cost of Post compliance could be recouped via delivery savings and thereafter residents would save the delivery costs. *Courier parcel deliveries would need to be direct to individual residences; as per most other gated communities. *Apart from facilitating mail deliveries there are other benefits if all residents have their own street address. This includes google map recognition, quicker emergency response, easier courier pickup and delivery access, easier visitor access and ability to obtain online quotes by having all residential addresses recognized online.
D) Indicative Financial Considerations Current Security Costs (GST inclusive) *2 Guards plus mail delivery. $583,071 Per Lot $964 *5 Year cost projections. $3.096 million Per Lot $5,117 *10 Year cost projections. $6.685 million Per Lot $11,050 Estimated upfront Capital Investment to move to unmanned gatehouses (GST Inclusive) *4 Boom gates @ $13,000 each. $52,800 *4 Gate upgrades @$22,000 each. $88,000 *4 Gate Intercoms @$7,700 each. $30,800 *8 Gate Cameras @ $2750 each. $22,000 *Camera Recording equipment. $17,000 *2 Remote controls per Lot. $50,000 *Contingency 30%. $78,000 Total estimated Capital Investment. $338,600 Projected Security Costs with unmanned Gatehouse & including mail delivery. (GST Inc.) *1 Guard plus mail delivery. $374,638 Per Lot $619 *5 Year cost projections. $1.989 million Per Lot $3,288 *10 Year cost projections. $4.295 million Per Lot $7,099 Projected Operating Savings current costs vs Unmanned Gatehouses & 1x24/7 Guard. *First Year. $208,433 Per Lot $345 *Over 5 Years. $1.107 million Per Lot $1829 *Over 10 years. $2.390 million Per Lot $3950 Capital Investment of $338,600 Payback Period. * Based on savings of $17,620 per month in first 2 years, 19.21 months to repay investment. ROI on $338,600 Investment. *Over 5 Years ROI is 227% *Over 10 years ROI is 606%
Additional Savings if Australia Post delivers mail. *$25,000 per year. *$125,000 over 5 years. *$250,000 over 10 years. *Estimated Investment cost of 605 Mailboxes installed. $50,000 *Payback period 24 months. *ROI over 5 years 150% *ROI over 10 years 400% Notes on Financials *5 and 10-year projections include 3% PA cost increases. *Capital Expenditure estimates use average figures supplied in submissions. These initial numbers demonstrate a financially compelling Business Case for the PBC to request and assess firm submissions and quotations for converting to unmanned Gatehouses. ROI is a standard performance measure used to evaluate the efficiency of an investment or to compare the efficiency of a number of different investments. ROI is a popular metric due to its simplicity. That is, if an investment does not have a positive ROI, or if there are other opportunities with higher ROI s, then the investment should not be undertaken.
E) Conclusions Based on direct comparisons with other gated communities and Expert recommendations there appears to be a factual case for considering NON-manned gatehouses. Initial estimates project substantial savings and attractive ROI s over 5 to 10 year periods. Alarm monitoring needs to be outsourced to a recognised accredited monitoring service facility that provides the monitoring integrity and guaranteed responses that are promised and expected by residents. Upgrading street names and mailboxes should be seriously considered to enable Post to do deliveries and deliver cost savings to residents. Again the investment required for changing provides an attractive ROI. It also provides a major benefit for all residents by enabling them to have online address recognition. Each lot will appear in the Australia Post address database, which is used by most companies. Residents will then not have to deal with their address not being recognized online by Government agencies and private companies. Automated access would be a requirement of non-manned gatehouses. The West automated access requires upgrading now for greater security control and more efficient access. Additional cameras at access points would be a requirement for non manned gatehouses and automated access. There needs to be a scheduled maintenance program for all security equipment. There need to be formalised monthly security reporting and management reviews. The current inequitable arrangement with the West having no security monitoring needs to be addressed. Whilst there seems to be a fairly compelling financial case for changing to unmanned gatehouses, all residents should still be given the option to continue with the current arrangement and fully understand what this would mean in terms of considerably higher yearly operating costs. All owners, not just the body corporate representatives, would need to be asked to vote on this change. It is also accepted that some residents may still have a preference to retain manned gatehouses regardless of any benefits that are clearly identifiable in changing to unmanned gatehouses. That is why all owners need to be given an opportunity to at least consider the alternatives. F) Recommendations The PBC directs the Security Sub-Committee or engages an external consultant to obtain firm costed proposals from Synergy, Acost and Australian Security for providing automated gate access and the associated infra structure upgrade required, alarm monitoring, 1 x 24/7 security guard and a proposed three year additional camera upgrade program. On receipt of final submissions all individual owners are asked to consider staying with the current security arrangement or changing to a non manned gatehouse with automated access and an outsourced approved and compliant alarm monitoring service. Owners would also be asked to consider installing mailboxes and changing to Post for mail deliveries at the same time. Owners would receive factual information and advantages and disadvantage summaries for each option. Owners would have the opportunity to attend an information meeting to ask questions about both options. Closing Comments This report represents the investigation and findings of the majority of the Security Sub Committee. We firmly believe there is a strong case that is in the best interests of all lot owners, for the PBC to proceed with our recommendations. All documentation used in compiling this report is available to the PBC.