HomeMy WebLinkAboutOPS 22-23Report to Council
Report Number: OPS 22-23
Date: September 5, 2023
From: Brian Duffield
Director, Operations
Subject: T2023-6 Construction of the Pickering Heritage & Community Centre
-File: A-1440
Recommendation:
1. That Report OPS 22-23 regarding T2023-6 Construction of the Pickering Heritage &
Community Centre (PHCC) be received;
2. That Tender No. T2023-6 for Construction of PHCC be cancelled without award due to
all bids exceeding approved budget in accordance with Appendix, item B and Part 3,
section 3.6.1, item (l) of the bid document;
3. That staff be directed to explore options to reduce overall project costs for PHCC by:
a)Obtaining an updated Class A cost estimate from Hanscomb Quantity Surveyors
in the amount of $11,704.00 (HST included), for comparison to the previous
Class A cost estimate received from the same firm in December 2022, to be
retained as sub-consultants to Hariri Pontarini Architects;
b)W orking with the project consultants, Hariri Pontarini Architects, to reduce the
project scope and related costs, then re-tender the project in time to secure new
pricing prior to the approval of the 2024 Capital Budget;
4.That a proposal for additional fees submitted by Hariri Pontarini Architects for consulting
and professional services required to reduce the scope of the project to meet budget
objectives in the amount of $108,762.50 (HST included) be approved;
5.That the Director, Finance & Treasurer be authorized to finance $97,944.00 (net of HST
rebate) for additional consulting fees to Hariri Pontarini Architects and $9,973.00 (net of
HST rebate) for Class A cost estimating to Hanscomb Quantity Surveyors from the
previously approved PHCC design Capital Budget as follows:
a) The sum of $49,642.00 to be funded from the Rate Stabilization Reserve;
b)The sum of $4,317.00 to be funded from the City Share DC Reserve;
c)The sum of $14,029.00 to be funded from the DC – Parks & Recreations
Reserve Fund;
d)The sum of $39,929.00 to be funded from the DC – Library Reserve Fund;
OPS 22-23 September 5, 2023
Subject: Tender T2023-6 Construction of the Pickering Heritage & Community Centre
Page 2
6. That the Director, Operations and Treasurer be authorized to award required Stage 4
archeological work to Toronto Region Conservation Authority using uncommitted funds
previously allocated for this purpose through Report OPS 03-23;
7. That the Director, Operations and Treasurer be authorized to award required
Indigenous monitoring services to the Haudenosaunee Development Institute for
additional work required to monitor the Stage 4 archeological work;
8. That the Director, Operations and Treasurer be authorized to award required
Indigenous monitoring services to the Huron-Wendat Nation for additional work required
to monitor the Stage 4 archeological work;
9. That the Director, Finance & Treasurer be authorized to reallocate uncommitted funds
approved in Report OPS 03-23 to complete required Stage 4 archaeological work;
10. That the Director, Finance & Treasurer be authorized to approve up to an additional
$113,000.00 (HST included) in funds to complete required Stage 4 archaeological work
and fin ance the net costs of $101,760.00 from the previously approved PHCC
construction Capital Budget as follows:
a) The sum of $32,492.00 to be funded from the DC – Parks & Recreation Reserve
Fund;
b) The sum of $2,921.00 to be funded from the DC – Library Reserve Fund;
c) The sum of $65,065.00 to be funded from the Rate Stabilization Reserve;
d) The sum of $1,282.00 to be funded from the Community Benefit Charge Reserve
fund; and,
11. That the appropriate City of Pickering officials be authorized to take the necessary
action to give effect hereto.
Executive Summary: A Request for Supplier Prequalification (RFSQ2023-4) was issued
on the City’s bids&tenders portal on January 25, 2023 and closed on February 16, 2023. Three
bidders were pre-qualified for a subsequent Tender. Tender No.T2023-6 for Construction of
the Pickering Heritage & Community Centre was issued on the City’s bids&tenders portal on
June 9, 2023 and closed on July 27, 2023. Only bids submitted by pre-qualified bidders were
accepted. Three bids were received for T2023-6. The lowest compliant bid submitted was in
the amount of $57,300,084.00 (net HST rebate), resulting in a total net project cost of
approximately $64,600,000.00. Total available budget for the project is $38,560,569.00.
If approved, the City’s share cost excluding DC funding and $16.5 million in secured grant
funding, would be approximately $19.2 million, which would need to be financed by debt. The
estimated annual repayment costs would be approximately $1.5 million (principal and interest)
OPS 22-23 September 5, 2023
Subject: Tender T2023-6 Construction of the Pickering Heritage & Community Centre
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over 20 years, with the current market interest rates. The City share debt charges related to
this project would translate into a 1.80 percent levy increase for the 2024 budget.
Given the broad range of other financial priorities, staff do not recommend awarding the project
at this price. Should the project be cancelled outright, the City also risks losing $4.0 million in
secured grant funding from the Canadian Cultural Spaces Fund (CCSF) and $12.5 million in
secured grant funding from the Green and Inclusive Community Buildings (GICB) program.
Staff instead recommend that the existing tender not be awarded, and that efforts be made to
reduce the scope and cost in an effort to re-tender the project to the same pre-qualified bidders
later in the year and in time to receive new pricing prior to approval of the 2024 Capital Budget.
Financial Implications:
1. Project Rescoping - Cost Summary
Hariri Pontarini Additional Fees (Design Budget)
Hanscomb Quantity Surveyors (Design Budget)
$96,250.00
9,800.00
Stage 4 Archeological Work Additional Fees (Construction Budget) 100,000.00
Total Project Costs (excluding taxes) $206,050.00
HST (13%)
26,787.00
Total Gross Additional Costs $232,837.00
HST Rebate (11.24%) (23,160 .00)
Total Net Additional Costs $209,677.00
2. Approved Source of Funds
Approved Code Source of Funds Funds Available Funds Required
Design Budget
C10220.2011 Rate Stabilization Res $105,148.00 $49,642.00
C10220.2011 City Share DC Res 9,793.00 4,317.00
C10220.2011 DC – Parks & Rec 32,643.00 14,029.00
C10220.2011 DC – Library 78,190.00 39,929.00
Design Total: $225,774.00 $107,917.00
Construction Budget
C10220.2011 DC – Parks & Rec $12,315,777.00 $32,492.00
C10220.2011 DC – Library 1,107,634.00 2,921.00
C10220.2011 Federal Grants (GICB) 12,500,000.00 0.00
C10220.2011 Federal Grants (CCSF) 4,000,000.00 0.00
C10220.2011 Debt – 20 Year 8,152,073.00 0.00
OPS 22-23 September 5, 2023
Subject: Tender T2023-6 Construction of the Pickering Heritage & Community Centre
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Approved Code Source of Funds Funds Available Funds Required
C10220.2011 Rate Stabilization R 0.00 65,065.00
C10220.2011 CBC Reserve Fund 485,085.00 1,282.00
Construction Total: $38,560,569.00 $101,760,00
Total Design and Construction: $38,786,343.00 $209,677.00
Design Project Cost under (over) approved funds by $117,857.00
Construction Project Cost under (over) approved funds by $38,458,809.00
PHCC design budget was approved in the 2018 Capital Budget at $1,503,779.00. To date, the
total costs incurred towards the design is approximately $1,278,005.00 (net of HST rebate),
including the net-zero re-design. When you add the costs associated with Recommendation 5,
the total year-to -date cost will be $1,385,922.00, resulting in a residual design remaining
balance of $117,857.00.
As per Resolution #79/23 (Report OPS 03-23) Council approved funding $328,431.00 (net of
HST rebate) from PHCC construction budget for Stage 3 archaeological work, and included
allowances for Stage 4 work, if required. This report is requesting an additional $101,760.00
(net of HST rebate) for Stage 4 archaeological work.
As referenced above, the project budget for construction is $38.56 million and the lowest
submitted bid was $57.3 million representing a variance of $18.74 million or 48.60 percent. As
the City undertakes the next step to reduce the project’s cost by revising the building’s footprint
size, Council should be aware that in this current high cost construction environment, that even
after the additional efforts, the total project cost may still be challenging for the City. The City’s
current capital plan consists of a long list of major new capital projects in conjunction with a
backlog of required asset management infrastructure investments that is now negatively
impacted from a financial lens regarding the current high cost construction environment and
high interest rates.
Currently, there are several valuable capital projects (new and asset infrastructure renewal),
that cannot be accommodated in the next few years. The recommended strategy is to take the
“list” (new and renewal) with the corresponding high dollar value and re-allocate the projects
into a more manageable “size” and timeframe both from a financial resource and workload
perspective. After each major project is completed, it would be recommended that the priority
list be reviewed to accommodate perhaps new needs and or possible senior level grant
funding opportunities. In other words, the “list” is not static—it is adapting to community needs
and financial opportunities.
The current work plan is for the Director, Finance & Treasurer, in consultation with senior
management, to bring forward a capital strategy report in early 2024. This report would
recommend major new capital projects for the next four years for Council’s consideration and
would also consider the City’s debt strategy in the context of the Provincially legislated Annual
OPS 22-23 September 5, 2023
Subject: Tender T2023-6 Construction of the Pickering Heritage & Community Centre
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Repayment Limit or (ARL). Included in this report would be results of the revised tender for
PHCC.
While staff remain optimistic that the revised building footprint strategy will bring the cost down
to an affordable amount, Council should be aware that there is a risk that the project may not
proceed if the revised cost still remains challenging in the context of considering the financial
demands of the new and existing infrastructure asset management dollar “asks”. Under this
scenario, staff would recommend that a $6.0 million capital expenditure be added to the draft
2024 Capital Budget for the construction of a basic museum administration building.
Discussion: Design of PHCC began with the approval of Report CS 19-18 on June 18,
2018 through Resolution #455/18, and was originally envisioned as a phased project. Report
CS 34-18, approved on December 10, 2018 through Resolution #08/18, expanded the project
scope to include design of the entire facility for construction as a whole. Council further
approved Report CS 20-19 through Resolution #72/19 on April 23 2019, endorsing a grant
application to the Canadian Cultural Spaces Fund (CCSF) grant program, ultimately securing
$4.0 million towards the project.
Although the Design work for the project started in August 2018, there were two significant
factors that delayed the eventual tender release date to June 9, 2023. The first delay occurred
in March 2020 due to of the City’s response to the onset of Covid-19 and the economic
uncertainty at that time. The actions taken to pause capital projects underway was authorized
by Council, as per Resolution 283/20. Report FIN 05-20 described a deferral of select capital
projects recognizing the disruption of workplace closures, supply chain disruptions and labour
shortages. At the time of this pause of work, the design was approximately 80 percent
complete on the pre-tender phase of the design deliverables.
The second delay to the project occurred in June 2021, in order to pursue GICB grant funding
which required major revisions to the project design to meet the conditions of the grant
application including a redesign to meet the Net Zero sustainable design standard. On June 3,
2021, Council approved Report CS 27-21 through Resolution #612/21, endorsing additional
funds for the preparation and application for funding from the GICB grant program. The City
was notified of its successful $12.5 million GICB grant application in June 2022. Additional
funds were subsequently approved through Report OPS 17-22 through Resolution #970/22 on
July 11, 2022, to convert existing designs to meet the Net-Zero carbon design requirements
associated with this grant.
A formal Class A estimate was obtained from Hanscomb Quantity Surveyors in December
2022, which is typically considered to be accurate within five to ten percent and included a five
percent design contingency for final pre-tender revisions as well as an additional five percent
inflation allowance anticipating tender by the summer of 2023. The project was tendered in
accordance with this schedule. Total construction cost was estimated at $37.2 million (pre-tax).
Additional funding was allocated in the 2023 Capital Budget to account for contingencies and
other related City costs, for a total estimated project cost of approximately $38.9 million (net
HST rebate). The low compliant bid result from Tender No. T2023-6 for construction costs only
was $56.3 million (pre-tax).
OPS 22-23 September 5, 2023
Subject: Tender T2023-6 Construction of the Pickering Heritage & Community Centre
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The results of Tender No. T2023-6 were not predictable and budgets were set on sound
project management principles. Upon approval, staff will seek an updated project cost estimate
to assist in the value engineering exercise to best target potential cost savings.
The PHCC project includes the redevelopment of the entire upper site of the Pickering
Museum Village (PMV) located at 2365 6th Concession road, located at the western edge of
the Hamlet of Greenwood. The scope of work includes construction of a new ~52,000 square
foot (~4,800m2) hybrid facility including shared program, administration, archival storage,
heritage resource space and their related support spaces.
The PHCC is intended to consolidate community services currently provided by third party
lease agreements with local community groups that operate several small northern facilities
not staffed by the City. It would also provide a needed upgrade to existing museum program
delivery spaces, enabling year-round operations, as well as replacing inadequate
administrative and support spaces. PHCC would also provide consolidated humidity and
temperature controlled collections and record storage for PMV’s historical artifacts, Pickering
Public Library’s Local History collection and the City’s administrative records archive. Each
area currently stores these materials in poor conditions that have become compromised over
time as needs have exceeded available capacity. Pickering Public Library will also provide
services at PHCC and there will be access to curated collections, comfortable spaces,
materials pick-up and drop-off, and computers and printers.
Both sources of grant funding secured for the project require its completion by March 31, 2026.
Should construction not proceed in early 2024, it will no longer be feasible to meet these
deadlines and the $12.5 million in grant funding from GICB and $4.0 million in grant funding
from CCSF may be lost. Conditions associated with the GICB grant required modification of
the previous design to meet Net-Zero-Carbon Design (version 2) as established by Canadian
Green Building Council (CaGBC). Council approved the re-design of the project as part of
Report 17-22 through Resolution #970/22 on July 11, 2022. In addition to being the City’s first
Net-Zero facility, PHCC would also be the first new community centre constructed in Pickering
in over twenty-five years, and be the first such facility opened to directly service the Seaton
lands.
City staff have met with staff from both granting organizations and the change in project scope
as proposed in this report will not affect eligibility for either grant program.
In order to also ensure that the project schedule can be maintained, it will be necessary to
complete ongoing archaeological work along the boundary at the northwest corner of the PMV
site, partially including lands currently owned by the TRCA. Stage 3 archaeological work was
completed this past spring and has identified a need for localized Stage 4 work. The Stage 3
work was completed by Archaeological Services Inc., as approved by Report OPS 03-23 on
February 27, 2023. Their work included both City and TRCA lands, as agreed upon by both
parties. TRCA has since expressed interest in completing the Stage 4 work with its own
archaeological forces. The Stage 4 area also straddled both properties. TRCA has confirmed
that they have teams capable of completing this work before the end of 2023, minimizing
related risks to the project. Work cannot proceed within the affected area, plus a surrounding
OPS 22-23 September 5, 2023
Subject: Tender T2023-6 Construction of the Pickering Heritage & Community Centre
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buffer zone, until all clearances have been obtained. Construction of the PHCC facility could
still proceed while the archaeological work is underway, but related siteworks cannot be fully
completed without eventual access to the area.
The City is separately negotiating the purchase of the required portion of lands from TRCA and
requires completion of the archaeological work in order for TRCA to provide an Access to
Enter agreement that would help facilitate construction activities for the rest of the project while
the land purchase is finalized. Momentum must be maintained on these initiatives to prevent
the development of any further risks, should Council decide to award the construction of a
modified PHCC project in early 2024.
A window of opportunity exists wherein the scope of work included in Tender No. T2023-6
could be modified to reduce overall project costs. Council would first need to authorize that
Tender No. T2023-6 be cancelled without award for exceeding available budget. In
accordance with Part 3, Section 3.6.1, item (l) of the bid document, the City reserves the right
to cancel the RFT process at any stage and issue a new RFT for the same or similar
deliverables. Staff would then work to reduce the physical footprint, finishes and other
provisions included in a new tender to be issued around the end of October 2023. This would
enable pricing to be received around December 2023, in time for review and consideration
ahead of Council approval of the 2024 Capital Budget. Approval of additional consulting fees in
the sum of $97,944.00 (net HST rebate) to Hariri Pontarini Architects will be required in order
to modify the construction documents prepared for Tender No. T2023-6 to be readied for re-
tender in accordance with the schedule outlined above.
Attachment: None.
Prepared By: Approved/Endorsed By:
Original Signed By: Original Signed By:
Brian Duffield Stan Karwowski, MBA, CPA, CMA
Director, Operations Director, Finance & Treasurer
Original Signed By: Original Signed By:
Vince Plouffe, OAA, MRAIC Sarah Douglas-Murray
Division Head, Operations Services Director, Community Services
OPS 22-23 September 5, 2023
Subject: Tender T2023-6 Construction of the Pickering Heritage & Community Centre
Page 8
Original Signed By:
Jackie Flowers
CEO / Director of Public Libraries
Original Signed By:
Cathy Bazinet, CPPB, NIGP-CPP
Manager, Procurement
BD:vp
Recommended for the consideration
of Pickering City Council
Original Signed By:
Marisa Carpino, M.A.
Chief Administrative Officer