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Home My WebLink AboutCAO 04-18DICKERING 6/, Report to Council Report Number: CAO 04-18 Date: May 14, 2018 From: Tony Prevedel Chief Administrative Officer Subject: Municipal Services Design for the Pickering Innovation Corridor - Seaton Community File: A-1440 Recommendation: 1. That Council approve the hiring of Sabourin, Kimble & Associates Ltd. to provide project management services and undertake the necessary studies and design work associated with the provision of municipal services for the Kubota Canada Ltd. site and other lands within the Pickering Innovation Corridor, in accordance with Purchasing Policy 10.03 (c) as the assignment is above $50,000; 2. That an upset limit of $600,000 plus HST be provided to finalize an agreement with Sabourin, Kimble & Associates Ltd. in order to meet Kubota Canada Ltd.'s required schedule; 3. That the total gross project cost of $600,000 plus HST be approved; 4. That Council authorize the Director, Finance & Treasurer to finance the net project cost from capital account 5203.1802.6265; That City staff be authorized to commence negotiations in order to finalize an agreement with Sabourin, Kimble & Associates Ltd. in a form satisfactory to the Chief Administrative Officer; 6. That staff be authorized to enter into an agreement with Kubota Canada Ltd. and other benefitting end users to recover the above noted project costs; and 7. That the appropriate officials of the City of Pickering be authorized to take the necessary actions as indicated in this report. Executive Summary: The City has recently purchased approximately 28 acres of land within the Pickering Innovation Corridor and is in the process of acquiring an additional 22 acres. The City will be selling this land to Kubota Canada Ltd. The subject lands will require servicing to be extended from the terminus point of the municipal services (sanitary sewer and water) that will be provided by the Seaton Landowners Group, to the site. In order to meet Kubota Canada Ltd.'s schedule, staff need to initiate this work immediately and begin the necessary studies and design to bring the services to the subject lands. CAO 04-18 May 14, 2018 Subject: Municipal Services Design for the Pickering Innovation Corridor Seaton Community Page 2 Sabourin, Kimble & Associates Ltd. has extensive experience and in-depth knowledge with the complexity of servicing, required studies and approvals in the Seaton Community. It is a diversified company that can provide the project management and design services for this assignment, in a timely manner, due to its familiarity with provincial and regulatory requirements of the Region of Durham, Ministry of Transportation, Ministry of Natural Resources & Forestry, Toronto & Region Conservation Authority, and Infrastructure Ontario that are applicable to this assignment. It is imperative that the City proceed with this assignment, as the environmental field work is seasonal and needs to commence immediately. In accordance with Purchasing Policy 10.03 (c) where the professional service assignment is expected to be above $50,000.00 and the initiating Director intends to acquire the services without going through a competitive process, Council approval is required to engage a firm for a professional services assignment. Financial Implications: In early April 2018, the City purchased 28 acres from Infrastructure Ontario (the Province) for the amount of $3,327,419. The purchase and sale agreement includes a clause whereby the City would now become a full member of the Seaton Landowner Group and would have to fund its share of development costs based on its ownership percentage. The City as a Seaton landowner has received its first cash call in the amount of $36,576 and there may be additional cash calls. When the City sells its land to Kubota Canada Ltd., all of these land associated costs plus legal fees will be added to the purchase price of the land. Recommendation 2 is seeking Council approval to hire a consulting firm to assist the City in designing the water and sanitary services from the border of the Pickering Innovation Corridor lands to the Kubota Canada Ltd. site at an estimated cost of $600,000 plus HST. This is phase 1 of the project's cost. Phase 2 expenditures will be based on construction costs related to bringing water and sanitary services from the Pickering Innovation Corridor border to Kubota Canada Ltd. with a preliminary estimated cost of approximately $4.0 million plus HST. After the project has been designed and tendered, staff will be bringing a report to Council for the awarding of the construction costs. The 2018 capital budget for the Pickering Innovation Corridor land cost is $6.0 million and the capital project description includes "development servicing costs" (Capital Budget Book binder, page 132) and therefore this project falls within the Council approved project's scope. The development servicing costs will be recovered from future landowners who are benefiting from these services. Kubota Canada Ltd. will reimburse the City for its share of these services plus an administrative fee that will also be charged to reflect the City's "cost of money" and staff time. The Kubota Canada Ltd. project represents a large up front financial investment for the City. However, when measuring and/or evaluating the project risks, Council should also take into consideration the direct and indirect economic benefits. A very preliminary estimate of the City's share of the property taxes is approximately $300,000 per year (the final design of the buildings will determine the project's assessment value). The Region of Durham will benefit from this project by receiving an estimated $550,000 in property taxes with limited staff effort or financial risk. This CAO 04-18 May 14, 2018 Subject: Municipal Services Design for the Pickering Innovation Corridor Seaton Community Page 3 project and corresponding employment will be a catalyst for the development of the rest of the corridor lands that in -turn will lead to additional non-residential property tax revenues. Discussion: In April of 2018, the City announced 4 major development projects for the Pickering Innovation Corridor: Kubota Canada Ltd., the Behar Group, Red Crest and Best Homes Canada. All 4 developments will be situated on the north side of Highway 407, between Sideline 26 (future Whites Road) and Sideline 22 (future Peter Matthews Boulevard). Kubota Canada Ltd. plans to construct a 500,000 square foot industrial building, along with 65,000 square feet of office space for its Canadian Headquarters. Its project team has met with City officials and has outlined a very aggressive timeline to construct and relocate its operations to Pickering. City staff have also met with the three other investors to understand their development plans and to coordinate the appropriate project timelines. In order to accommodate the project timelines for Kubota Canada Ltd. and the other users on the north side of Highway 407, the City plans to initiate the appropriate environmental work required by the City, Region of Durham, Ministry of Transportation, Ministry of Natural Resources & Forestry, Toronto & Region Conservation Authority, and Infrastructure Ontario, as well as, the design and construction work required to bring the water and sanitary services to the individual lot lines for each user. The Employment Lands within the Seaton Community, known as the Pickering Innovation Corridor, have been identified as a priority for servicing in the Seaton Phase 1 Regional Infrastructure Front Ending Agreement. Construction contracts to provide these services have been tendered and executed and trunk services (water and sanitary sewer) construction has commenced with anticipated completion by the end of 2018. Services to the Employment Lands will be located on the northeast quadrant of the Whites Road/Highway 407 interchange. From that location, local sanitary sewer and water services will need to be designed and constructed eastward toward Sideline 24 in order to provide services to the Kubota site and other lands within the Pickering Innovation Corridor. Sabourin, Kimble & Associates Ltd. has extensive experience and in-depth knowledge with the complexity of servicing, required studies and approvals in the Seaton Community. It is a diversified company that can provide the project management and design services for this assignment, in a timely manner, due to its familiarity with provincial and regulatory requirements of the Region of Durham, Ministry of Transportation, Ministry of Natural Resources & Forestry, Toronto & Region Conservation Authority, and Infrastructure Ontario that are applicable to this assignment. It is imperative that the City proceed with this assignment, as the environmental field work is seasonal and needs to commence immediately. Staff are working with Sabourin, Kimble & Associates Ltd. to receive a detailed proposal outlining the full scope of work (environmental, geotechnical, transportation, archeological, municipal servicing) and the associated fee. As time is of the essence, staff are recommending that an upset limit of $600,000 plus HST be approved by Council for this assignment. ‘11 za6 CAC 04-18 May 14, 2018 Subject: Municipal Services Design for the Pickering Innovation Corridor Seaton Community Page 4 Prepare! By: Fiaz Jaaoon Manager, Economic Development & Strategic Projects Richard Holborn, P.Eng. Dir ctor, Engineering Services Stan Karwowski, MBA, CPA, CMA Director, Finance & Treasurer TP:jh Recommended for the consideration of Pickering City Council Tony Prevedel, P.Eng. Chief Administrative Officer