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Home My WebLink AboutCOD-056-06 q![-!!Jgron REPORT CORPORATE SERVICES DEPARTMENT Meeting: COUNCIL Report #: COD-056-06 File#_ , . C 4' OS -[;(, ~0kn\/vdt. - ' By-law # .;loO<O - J ?CJ ~co(" -,C/o Date: SEPTEMBER 25TH, 2006 Subject: CL2006-44, NEWCASTLE RECREATION FACILITY Recommendations: It is respectfully recommended to Council the following: 1. THAT Report COD-056-06 be received; 2. THAT Aquicon Construction Company Ltd., Brampton, Ontario with a total revised bid in the amount of $15,065,884.00 (Excluding G.S.T.), being the lowest responsible bidder meeting all terms, conditions, and specifications of Tender CL2006-44, be awarded the contract for the Newcastle Recreation Facility as required by the Community Services Department; 3. THAT the Newcastle Recreation Facility total budget be approved at $17,155,000.00 including consulting, utility connections, equipment/furnishings, project contingency and disbursements; 4. THAT Council express its intent to fund this project including debenture repayments and financing to the extent allowable from future development charges; 5. THAT the Director of FinancefTreasurer be authorized to make application to the Region of Durham for a debenture in the amount of $17,155,000.00 plus debenture costs to finance the total cost of the Newcastle Recreation Facility; and 6, THAT the attached By-law marked Schedule "A" authorizing the Mayor and the Clerk to execute the necessary agreement be approved. -.., /' 1 I/V"-r '1<... Reviewed b~-~~Z' --.. \... Franklin Wu, Chief Administrative Officer MMILABlkm CORPORATION OF THE MUNICIPALITY OF CLARINGTON 40 TEMPERANCE STREET, BOWMANVILLE, ONTARIO L 1C 3A6 T(905)623-3379 F (905)623-4169 REPORT NO.: COD-056-06 PAGE 2 BACKGROUND AND COMMENT Tender specifications were provided by Shore Tilbe Irwin & Partners, Toronto, Ontario for the Newcastle Recreation Facility within the Municipality of Clarington, as required by the Community Services Department. A pre-qualification process took place with six (6) firms being invited to bid. Subsequently, tenders were received and tabulated as per Schedule "B" attached. A preliminary project budget was previously established at $17,155,000.00. During the design phase, Community Services staff and the consultants have worked diligently to design a functional facility which would refiect the standard that our residents have come to expect. Staff is confident we have accomplished that goal and it is now appropriate to approve the project budget as indicated above at $17,155,000.00. A breakdown of the project budget is provided as follows: TOTAL $ 15,065,884.00 $ 950,000.00 $ 684,116.00 $ 355,000.00 $ 100.000.00 $ 17,155,000.00 Construction Consulting Project Contingency Furnishing and Equipment Disbursements As the low bid in the amount of $15,857,000.00 exceeded the initial construction estimate of $15,000,000.00 negotiations were entered into with the low bidder, Aquicon Construction Company LId Through this process, revised pricing was received for such items as landscaping, acoustic ceiling panels, interior finishes, footing/retaining wall for future arena, mechanical and electrical changes, which realized a cost savings of approximately $791,116.00. This results in a revised tender bid of $15,065,884.00 Proiect Financinq As indicated in Report CSD-10-05, this project has been identified in the Municipality's Development Charges Background Study, May 2005 with 90% of the project to be funded from the Indoor Recreation Development Charges component. The balance of 10% is a mandatory discount under the DC Act that must be funded from tax levy. In the Development Charges Study under the Indoor Recreation category, the Newcastle Recreation Facility estimated cost of building, land, furnishings and equipment is $13,053,000.00. As the revised project cost is $17,155,000.00, it is recommended that the increased cost due to infiationary factors of $4,102,000.00 be included in the next Development Charges Study review to be collected from development charges collections from the post 2014 period. REPORT NO.: COD-056-06 PAGE 3 A debenture of $17, 155,000.00 over a 15 year period based on an interest rate of 5% has estimated annual repayments of $1 ,400,000.00 with 90% funding from the development charges of $1 ,260,000.00 and $140,000.00 from the tax levy. As a result, there will be an additional tax levy impact on 2007 of $140,000.00. The exact amount of the repayment would be determined at the time of the debenture issuance by the Region of Durham. Based on the growth forecast in the Development Charges Study, the Indoor Recreation Development Charges collections will not sustain financing the full annual debt repayment for the Newcastle Recreation Facility because a component of the facility will service growth beyond the 2014 period. As the Indoor Recreation Development Charges is financing annual debt repayments of approximately $1,500,000.00 for the South Courtice Arena and the Bowmanville Indoor Soccer Facility, there is an approximate shortfall of $400,000.00 annually in the Development Charges financing until the year 2013. This was projected in the cash flow analysis as part of the Development Charges Background Study, May 2005. It is recommended that the $400,000.00 shortfall in Development Charges collections flow through the Indoor Recreation Development Charges Reserve Fund as any collections beyond the forecasted growth projections will offset the shortfall each year. Any remaining shortfall will accumulate until the Development Charges has adequate collections to finance the Newcastle Recreation Facility debt repayments along with the South Courtice Arena and the Bowmanville Indoor Soccer Facility. As indicated, this was projected in the cash flow portion of the Development Charges Background Study and the charge was adjusted to reflect this at the time of the study. However, there will be no opportunity for further growth related indoor recreation to be financed through development charges for some time. This will be analyzed in the next review of the municipality's development charges which must be completed by 2010. The Director of Finance has reviewed the funding requirements and concurs with the recommendation. Queries with respect to department needs, specifications, etc., should be referred to the Director of Community Services. After further review and analysis of the bids by the Community Services Department, Shore Tilbe Irwin & Partners, Toronto and Purchasing, it was mutually agreed that the low bidder, Aquicon Construction Company Ltd., Brampton, Ontario, be recommended for the contract for the Newcastle Recreation Facility. Attachments: Attachment 1 - Schedule "A", By-law Attachment 2 - Schedule "B", Bid Summary Schedule "An THE CORPORATION OF THE MUNICIPALITY OF CLARINGTON BY-LAW 2006- Being a By-law to authorize a contract between the Corporation of the Municipality of Clarington and Aquicon Construction Company Ltd., Brampton, Ontario, to enter into agreement for the Newcastle Recreation Facility. THE CORPORATION OF THE MUNICIPALITY OF CLARINGTON HEREBY ENACTS AS FOllOWS: 1. THAT the Mayor and Clerk are hereby authorized to execute, on behalf of the Corporation of the Municipality of Clarington and seal with the Corporation Seal, a contract between, Aquicon Construction Company Ltd., Brampton, Ontario, and said Corporation; and 2. THAT the contract attached hereto as Schedule "A" form part of this By-law. By-law read a first and second time this day of ,2006. By-law read a third time and finally passed this day of ,2006. John Mutton, Mayor Patti L. Barrie, Municipal Clerk ClJ1!i!!gton Municipality of Clarington SCHEDULE "B" BID SUMMARY TENDER CL2006-44, CONSTRUCTION OF THE NEWCASTLE RECREATION FACILITY I BIDDER I TOTAL BID ~ The Atlas Corporation $16,575,000.00 Concord, ON Maystar General Contracting Inc. $15,900,000.00 Concord, ON Aquicon Construction Co. Ltd. $15,857,000.00 Brampton, ON