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HomeMy WebLinkAboutPWD-009-22Clarftwn Staff Report If this information is required in an alternate accessible format, please contact the Accessibility Coordinator at 905-623-3379 ext. 2131. Report To: General Government Committee Date of Meeting: March 21, 2022 Report Number: PWD-009-22 Submitted By: Stephen Brake, Director of Public Works Reviewed By: Mary -Anne Dempster, CAO Resolution#: GG-158-22, C-089-22 File Number: CRC. BaselineRd.4.01 By-law Number: Report Subject: Region of Durham Contract D2021-43 — Courtice Trunk Sanitary Sewer & Baseline Road Reconstruction / Urbanization — Courtice Road to Trulls Road Recommendations: 1. That Report PWD-009-22 and any related communication items, be received; 2. That funding for the Municipality's share of joint project costs for the reconstruction / urbanization of Baseline Road from Courtice Road to Trulls Road in the amount of $3,344,172.19 (which includes $540,977.22 for secondary costs such as contract administration, inspection, material testing, contingencies, net HST and $317,109.33 for design, utility relocations, and permits) be approved and be drawn from the following Public Works Department Capital Accounts: Baseline Road Reconstruction (Trulls Road to Courtice Road) Account Amount 110-32-330-84341-7401 $2,500,000.00 Additional Funding Required Account Amount Municipal Capital Works Program Reserve Fund $48,371.07 Roads and Related Development Charges Reserve Fund $795,801.12 Total Funding $3,344,172.19 3. That all interested parties listed in Report PWD-009-22 and any delegations be advised of Council's decision. Municipality of Clarington Report PWD-009-22 Report Overview Page 2 To request approval from Council for utilization of additional funding from the Municipal Capital Works Program Reserve Fund and the Roads and Related Development Charges Reserve Fund to fund the deficit of the Municipality's apportioned cost share of the Courtice Trunk Sanitary Sewer & Baseline Road Reconstruction / Urbanization — Courtice Road to Trulls Road project being led by the Region of Durham. 1. Background 1.1 In 2019 the Public Works Department and Region of Durham initiated a joint project for the reconstruction / urbanization of Baseline Road from Courtice Road to Trulls Road as part of the Region of Durham's extension of the Courtice Trunk Sanitary Sewer (CTSS) from Courtice Road to Bloor Street in Courtice. The CTSS would extensively impact Baseline Road that was slated for improvements and a collaboration on this project typically produces cost and implementation efficiencies. Collaboration on projects of this nature also aids in avoiding consecutive projects at the same location. The reconstruction / urbanization of Baseline Road includes road base reconstruction & widening, dedicated in -road bicycle lanes, storm sewer installation, asphalt replacement, curb and gutter installation, sidewalk, and driveway and landscape area restoration. The project limit area for the CTSS is outlined in Figure 1 below. Figure 1- Project limit for the Courtice Trunk Sanitary Sewer Municipality of Clarington Report PWD-009-22 Page 3 1.2 The 2019 Municipal Capital Budget had approved $2,500,000 for the Municipality's share of costs in the project. Of this amount $2,356,750 (94.27%) was to be funded through Development Charges — Roads & Related and $143,250 (5.73%) was to be funded through the Municipal Capital Works Program Reserve Fund. 1.3 Due to the expected cost magnitude of the Region of Durham's share of the project (estimated at greater than 90% of total project costs at project initiation) it was agreed that the Region of Durham would be the project lead and manage project coordination, tendering, award, and execution of the contract. 1.4 Public Works and the Region of Durham determined a cost share allocation of each item of the contract prior to tender which was based on an equitable and representative distribution of project costs in relation to the impact of each party's respective works. 2. Project Tendering 2.1 The Region of Durham published the `Courtice Trunk Sanitary Sewer and Watermain Installation (Phase 3) and Baseline Road Reconstruction in the Municipality of Clarington' tender on the Region of Durham's Bids & Tenders page on January 20, 2022. The tender closed on March 4, 2022 and seven (7) bids were received. The bid results can be accessed on their Bids & Tenders page. 2.2 The Region of Durham subsequently reviewed the received bids for compliance to their bid requirements and prepared a low -bid cost apportionment between the Municipality and Region of Durham based on the previously agreed upon cost share split prior to tender. 2.3 The lowest compliant bid was submitted by Pachino Construction Co. Ltd. in the amount of $36,234,305.40 and was utilized to conduct the low -bid cost apportionment to the Municipality. 3. Cost Share, Rationale, and Funding Review 3.1 The Region's low -bid cost apportionment allocated a cost share of $2,486,085.65 to the Municipality. In addition to the cost share of construction works, secondary costs are attributable to the Municipality's share of the project and include a 10% cost - $248,608.57 that was additionally applied to both a contingency (typical in construction projects) and contract administration, inspection, & geotechnical works (standard agreed upon percentage between the Region and the Municipality). The standard 1.7602% rebatable HST rate - $43,760.08 was also applied. 3.2 The total secondary cost under the Region of Durham's contract is $540,977.22. Municipality of Clarington Report PWD-009-22 Page 4 3.3 The total cost share and Purchase Order that will be required to be issued to the Region of Durham is $3,027,062.86. 3.4 Public Works has engaged in previous pre -construction activities including design, utility relocations, and permits which has committed $317,109.33 of the original $2,500,000.00 budget. These costs were directly incurred by the Municipality and are outside of the cost apportionment with the Region of Durham detailed above as they are directly 100% Municipal costs. For example, the Region of Durham's design was solely focused on the sewer and watermain design and did not account for future road urbanization design which is the responsibility of the Municipality. Additionally utility relocations that are required as a result of the road urbanization design are therefore a cost incurred by the Municipality. Permits from the Conservation Authority needed to be approved and secured before tendering to ensure that the design adhered to their requirements and could be confidently tendered without risk of a change of scope. 3.5 The remaining balance of uncommitted funding is $2,182,890.67 which leaves a funding shortfall of ($844,172.19). 3.6 As the project is being led by the Region of Durham whose work comprises 93.1 % of the total value of the construction contract, the Municipality is unfortunately in the position to accept the lowest compliant bid that is favorable to the Region of Durham, regardless of the unit rates of the individualized items in the road construction component of the contract that are directly the cost responsibility of the Municipality. In this scenario it is unlikely that the Municipality would receive lowest pricing for the Municipality's works given the nature and type of work in the Region of Durham's contract. 3.7 Road reconstruction / urbanization projects can proceed independently to a Regional project in an attempt to receive more favorable pricing however there is an inherent risk and usually involves a large amount of throwaway cost in proceeding with each project independently. The cost share split between the Municipality and the Region of Durham was determined through establishing the limits of work that the Region of Durham would be required to do to restore Baseline Road to its existing condition as a rural road profile and applying that equivalency into the cost share allocation. Approximately $955,000 of road works costs (pre -HST) are cost share attributable to the Region of Durham under this contract. 3.8 Should Public Works have proceeded independently with its reconstruction and urbanization of Baseline Road, the road works would not have been able to be initiated until the conclusion of the Region of Durham works (2024 at earliest). The Municipality would have needed to discard of the recent reinstatement works the Region of Durham would have performed after the sewer was installed yielding a substantial throwaway cost for both parties. In addition to the direct cost of construction, Public Works would have had to undertake separate preparatory and investigative works prior to Municipality of Clarington Report PWD-009-22 Page 5 construction such as topographic survey, soils investigations for management of excess soils, etc. that are presently shared under the joint project but are limited in validity by time expiry. 3.9 It is likely that the advancement of development that is forecasted for the neighbouring lands would place pressure on the Municipality to advance the reconstruction / urbanization works, particularly with the provision of the trunk sanitary sewer and any reinstatement works performed by the Region would therefore be short lived. 3.10 It should be noted that the project's budget approval in 2019 was prior to the Covid-19 pandemic and the associated inflationary impacts that are presently being observed across the industry and province and may be contributing to the funding shortfall. Should the road reconstruction / urbanization project proceed independently there is a risk of further inflationary pressures impacting the project budget due to the delay in starting construction. 3.11 Public Works concluded that, on a project of this scale, the impacts to the overall project budget in not seeking synergies with the Region of Durham were outweighed by any unit rate cost reductions that may be observed in narrowing the focus to an independent road reconstruction / urbanization project. 3.12 It is recommended that the additional funds required for the completion of the projected be provided from the following accounts which follows the previously approved funding split. • Municipal Capital Works Program Reserve Fund (5.73%): $48,371.07 • Roads and Related Development Charges Reserve Fund (94.27%): $795,801.12 4. Timing 4.1 The Region of Durham will execute the CTSS and Baseline Road reconstruction contract as soon as budget approval is received, and works are expected to commence in April 2022 and conclude in 2023. 4.2 Timing is of the essence in this contract to ensure that the Baseline Road reconstruction component of the contract can be finished and re -opened to the public prior to the end of 2022 as the Ministry of Transportation will be conducting rehabilitation works on local Highway 401 structures in 2023 which will impact detour routes. 5. Concurrence This report has been reviewed by the Director of Financial Services/Treasurer who concurs with the recommendations. Municipality of Clarington Report PWD-009-22 6. Conclusion Page 6 It is respectfully requested that Council approve the utilization of the Roads and Related Development Charges Reserve Fund ($795,801.12) and Municipal Capital Works Program Reserve Fund ($48,371.07) for additional funding in the total amount of $844,172.19 in addition to the previously approved $2,500,000 in the 2019 Capital Budget. Staff Contact: Robert Brezina, Capital Works Engineer, 905-623-3379 Ext. 2331 or rbrezina@clarington.net Attachments: Not Applicable Interested Parties: The following interested parties will be notified of Council's decision: Michael Harris, Works Department, Regional Municipality of Durham