HomeMy WebLinkAboutOES 40/01
REPORT TO COUNCIL
FROM:
Everett Buntsma
Director, Operations & Emergency Services
DATE: December 11,2001
Gillis Paterson
Director, Corporate Services & Treasurer
REPORT NUMBER: OES 40-01
SUBJECT: Don Beer Arena - Expansion & Renovation
File: cm 000
RECOMMENDATION:
1. That the joint report of the Operations & Emergency Services Department and the
Corporate Services Department be received;
2. That Council approve the calling of a Tender for the Don Beer Expansion & Renovation
Project;
3. That staff report back to Council, through the Finance & Operations Committee, at the
earliest possible date in 2002 on the results of the Tender (RFP) and the financing of this
project; and,
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4.
That the appropriate staff of the City of Pickering be given authority to give effect
thereto.
ORIGIN:
Correspondence from Pickering Minor Hockey Association
Council Resolution #99/00
Council Resolution #121/00
Council Resolution #4/01
AUTHORITY:
The Municipal Act, R. S. 0. 1990, as amended, Section 210.1 (1)
FINANCIAL IMPLICATIONS:
Based on the Report to Council dated Sept. 20, 2000, the total cost of the project was $3,419,000.
The number was later revised to reflect an increase in construction and contingency costs based
on the consultant's estimate as of March 2001. The revised total cost is $3,848,000. This revised
number was reflected in the Ontario Super Build grant application dated Apri111, 2001.
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With a revised project cost from the original Report to Council, the funding allocation has to be
adjusted accordingly. A joint application between the City of Pickering and Participating User
Group (pUG) consisting of the Pickering Minor Hockey Association and Durham West Girls
Hockey Association was made to the SuperBui1d Fund in the amount of $1,174,000 leaving
$2,674,000 to be paid by these two bodies, on a 50:50 basis with a maximum contribution of
$1,500,000 from PUG. We have yet to receive a response from Ontario SuperBui1d.
Report to Council OES 40-01
Date: December 11,2001
Subject:
Don Beer Arena - Expansion & Renovation
- File: COl 000
Page 2
EXECUTIVE SUMMARY:
The following report is being presented at this time at the suggestion of the Chief Administrative
Officer, to facilitate a timely discussion of this matter. The Don Beer Expansion & Renovation
Project, Design Phase was approved through Council Resolution #121/00 in September of 2000.
Staffand the project partners have now completed this stage of the Project and it is appropriate to
consider the next phase. Moreover, the PUG are anticipating the opening of this facility for the
2002 - 2003 hockey season. If there is any possibility for the facility to open for the next season
approval to tender the project must be considered at this time.
BACKGROUND:
In 2000 the Partners (Minor Hockey) presented to Council a business case and needs analysis for
an additional ice pad at Don Beer Arena. Staff subsequently reviewed this information and
submitted a Report to Council in September of 2000 indicating the need for an additional ice pad
as per the partners report. Council subsequently approved through Resolution #121/00 the
design of the Expansion & Renovation Project.
Resolution #121/00, Item # 3:
"That Report OES #11-00 be received by Council and that:
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1. Staff be directed to proceed with design and construction drawings for an
additional indoor ice surface at Don Beer Arena;
2. Council authorize an expenditure of up to $215,000 for professional
services related to the design development and construction drawings;
3. Staff be directed to provide project costing and financing at the time of the
2001 Budget deliberations;
4. Staff be authorized to meet with the Pickering Ice Rink Committee to
discuss project fundraising programs with $1.5 million to be raised in less
than a 10 year period by the Committee;
5. The appropriate officials of the City of Pickering be given authority to give
effect thereto".
In January, 2001 Council further confirmed through a Notice of Motion Resolution #4/01 that
this project was the top priority project for a SuperBui1d application.
Resolution #4/01:
"WHEREAS the Council of the Corporation of the City of Pickering has
received and considered the Government of Ontario SuperBuild Corporation
Sports, Culture and Tourism Partnerships ("SCTP'') initiative Round 1
Application Guidebook (the "Guidebook''); and
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WHEREAS Council has assessed its capital priorities against the SCTP
initiative Round 1 application requirements as set out in the Guidebook and
intends to submit a letter of intent for qualifYing the "Don Beer Arena addition
and renovation" project (the "Project'') for funding under Round 1 of the
SCTP initiative; and
WHEREAS Council confirms that the Municipality is compliant or in the
process of gaining compliance with the new Ministry of Environment Drinking
Water Protection Regulation, Ontario Regulation 459/00 made August 9, 2000
("DWPR''); and
Report to Council OES 40-01
Date: December 11, 2001
Subject:
Don Beer Arena - Expansion & Renovation
- File: C01000
Page 3
WHEREAS Council considers the Project to be its highest sport, recreational,
cultural or tourism infrastructure priority for the Municipality; and
WHEREAS Council confirms that the Municipality does not have any
outstanding public health and safety issues or projects affecting its existing
sport, recreational, cultural and tourism facilities; and
WHEREAS Council has made this resolution on the understanding that the
recitals set out herein will be relied upon by the Ontario SuperBuild
Corporation in considering the Project application for funding under Round 1
of the SCTP initiative;
NOW THEREFORE the Council of the Corporation of the City of Pickering
hereby resolves that the Clerk is directed to submit a letter of intent to the
Ontario SuperBuild Corporation respecting the qualification of the Project for
funding under Round 1 of the SCTP initiative".
Subsequently staff made application for approximately $1,174,000 of SuperBuild funding to
offset the cost for the City and its partners. Approval of this application has, as yet, not been
received but we understand information regarding the program is imminent (before December
20,2001). In the interim, the PUG have indicated that their continued support is contingent on
this project opening for use for the 2002 - 2003 hockey season.
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Below are two scenarios outlining the impact of financing this project both with an approved
SuperBuild grant and without the approved grant.
Scenario I (with SuperBuild) - as per grant application
City Share
Partner Share
SuperBuild Share
Total
$1,337,000
1,337,000
1.174.000
$3,848,000
Should the City receive approval for SuperBuild funding in the amount of $1,174,000, the
balance of $2,674,000 still remains to be financed by the City. The Participating User Group
have indicated that they are willing to fund 50% of the balance to a maximum of $1,500,000.
Originally, they anticipated these funds would be raised and forwarded to the City over the next 5
years, however, 10 years has also been mentioned. In the meantime the cost of the expansion and
renovations must still be paid for presumably in 2002. Therefore the City would be temporarily
financing the PUG's share of the costs of $1,337,000, together with the interest thereon, in the
amount of approximately $ 1 million for a total cost of approximately $2.3 million, pending
receipt of the funds. Therefore the total cost of the City will be $1,337,000, plus interest ($1.0
million) over the next five to ten years plus interest ($1 million) on the PUG funding for a total
of$3,337,000 over the next five to ten years.
The City's share of the Capital cost will be funded by a combination of the
Reserve and debt financing. The estimated 2001 balance of the Reserve for Replacement Capital
- Arena portion is estimated at $311,000 with $215,000 to be transferred to pay for the original
design phase of the project as approved in the 2001 capital budget.
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Therefore, the City will [mance the total cost of $2.6 million ($3.8 million less $1.2 million
SuperBui1d Grant), over 10 years resulting in annual costs of approximately $353,000. If
contributions from PUG average $200,000 per year then a Special Capital Levy of 1 % should pay
for the balance.
Scenario n (without SuperBuild)
City Share
$2,348,000
Report to Council OES 40-01
Date: December 11, 2001
Subject:
Don Beer Arena - Expansion & Renovation
- File: C01000
Page 4
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Partner Share $1.500,000
Total $3.848,000
In this scenario there is no SuperBuild funding, the PUG's share remains at a maximum of
$1,500,000 and the City's share has increased to $2,348,000. The City will have to finance the
entire amOlUlt resulting in annual costs of approximately $520,000 per year for 10 years. If PUG
contributions average $150,000 per year then $370,000 remains to be recovered by the City
resulting in a 1.5% Special Capital Levy.
It is clearly understood by staff that this is a tenuous situation for the City and it's partners,
however the loss of our partners, should the project be delayed further, is not an acceptable
alternative for the viability of the project.
Needless to say should the City not receive the grant from SuperBuild and/or lose its partners,
staffwould have no option but to recommend the project not proceed.
Conclusion:
Therefore, in an effort to secure the partners continued involvement, staff recommend proceeding
with the Tender Phase of the project immediately and will continue to pursue SuperBuild
approval information.
In addition to the capital cost, there are annual operating costs in the estimated amount of
$825,000 (year 1 cost only) with offsetting revenues of approximately $775,000.
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The greatest concern of staff continues to be the financing and impact on Budgets and the tax
levy.
It should be noted that bidders will have to be advised that this project mayor may not proceed
depending upon Council's final decision on the matters noted above. Moreover, prices will most
likely be firm for 60 days thereby allowing for further review in the budget process.
ATTACHMENTS:
Not applicable
Prepared IApproved I Endorsed By:
.~.~
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Evere tsma
Director, Operations & Emergency Services
Gillis Paterson
Director, Corporate Services & Treasurer
EB:mld
Copy: Chief Administrative Officer
Director, Operations & Emgerency Services
Director, Corporate Services & Treasurer
Manager, Supply & Services
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Recommended for the consideration of Pickering
City Council