HomeMy WebLinkAboutOPS 14-22 Report to Council
Report Number: OPS 14-22 Date: April 25, 2022
From: Brian Duffield
Director, Operations
Subject: Chestnut Hill Developments Recreation Complex Generator Replacement - File: A-1440
Recommendation:
1. That the proposal submitted by Elexicon Group, dated January 22, 2022, in the amount
of $1,164,804.00 (HST included) be accepted;
2. That the total gross project cost of $1,469,904.00 (HST included), including the amount of the tender, consulting, contingency, and other associated costs, and the total net project cost of $1,323,694.00 (net of HST rebate) be approved;
3. That the Director, Finance & Treasurer be authorized to finance the total net project
costs of $1,323,694.00 as follows:
a) the sum of $1,100,000.00 from previously approved 2019 Capital Budget be increased to $1,200,000, to be financed by the issue of debentures by the Regional Municipality of Durham over a period not to exceed ten years; and,
b) the annual debenture repayment charges in the amount of approximately
$140,246.00 to be included in the annual Current Budget for the City of Pickering
commencing 2022, or such subsequent year in which the debenture is issued, and continuing thereafter until the debenture financing is repaid;
c) the Director, Finance & Treasurer to be authorized to make any changes, adjustments and revisions to amounts, terms, conditions, or to take any actions
necessary in order to effect the foregoing;
d) the sum of $123,694.00 through a transfer from Property Taxes;
4. That the draft debenture by-law attached to this report be enacted; and,
5. That the appropriate City of Pickering officials be authorized to take the necessary action to give effect hereto.
Executive Summary: The existing 175kW backup power generator serving the Chestnut Hill Developments Recreation Complex (CHDRC) is original to the building, having been installed when it was first constructed in 1983. The unit can no longer be maintained and has
reached the end of its serviceable life. Due to increasing demand for backup power at this facility, including the need to power mechanical systems essential to its operation as an
OPS 14-22 April 25, 2022
Subject: CHDRC Generator Replacement Page 2
emergency heating and cooling centre, the capacity of the replacement generator must be
increased.
Due to its size, the new generator will also need to be mounted on a new, exterior concrete pad on the arena side of the facility and require an acoustic enclosure in order to mitigate noise during its operation. Generators typically have long lead times for delivery. Recent supply chain disruptions have further aggravated and extended these timelines to a degree
which may place the existing equipment at risk of failure. Given the City’s business connection
with the Elexicon Group and the additional supply chain access and buying power they hold in this market, staff have worked directly with the utility to develop a viable, timely and cost effective solution to replace this critical infrastructure.
Subject to receipt and approval of all submittals required, the proposal submitted by Elexicon
Group, dated January 22, 2022, in the amount of $1,164,804.00 (HST included) is
recommended for approval. The total gross project cost is estimated to be $1,469,904.00 and the total net project cost is estimated at $1,323,694.00 (net of HST rebate).
Financial Implications:
1. Tender Amount
Elexicon Group Proposal $1,030,800.00
HST (13%)
Total Gross Tender Cost
134,004.00 $1,164,804.00
2. Estimated Project Costing Summary
Elexicon Group Proposal $1,030,800.00
Consulting, Testing & Inspection 150,000.00 Controls 40,000.00 Construction Contingency (8%) 80,000.00 Total Project Cost $1,300,800.00 HST (13%) 169,104.00
Total Gross Project Costs $1,469,904.00
HST Rebate (11.24%) (146,210.00)
Total Net Project Cost $1,323,694.00
3. Approved Source of Funds - Community Centres Capital Budget
Approved Code 504100-C10225.1902
504100-C10225.1902
Source of Funds 10-Year Debt
Property Taxes
Funds Available $1,100,000.00
124,819.00 $1,224,819.00
Funds Required $1,200,000.00
123,694.00 $1,323,694.00
OPS 14-22 April 25, 2022
Subject: CHDRC Generator Replacement Page 3
Project Cost under (over) approved funds by ($98,875.00)
Section 11.02 of the Financial Control Policy (FIN 030) requires that where authority has been given in the annual Capital Budget for a particular project, the Chief Administrative Officer, the appropriate Department Head(s), and the Treasurer may jointly approve changes to such authorized amounts provided that the total amount of the over expenditures: (a) does not
exceed the lesser of ten percent of the approved capital expenditure or $100,000.00; and, (b)
are offset by corresponding under expenditures in other approved capital expenditures.
Additionally, Section 11.05 requires that Current and Capital Budget expenditures in excess of the limits established under Section 11.02 shall require the approval of the Treasurer, the Chief Administrative Officer, and Council.
Single source purchase of the replacement generator is required in accordance with Section
09.03 of the Purchasing Policy (PUR-010) due to unstable market conditions leading to long lead and delivery times and the required goods being in short supply. Elexicon Group, as a local utility, has greater buying power and the ability to ensure that the required equipment is delivered as soon as possible, maintaining backup power capacity at CHDRC while mitigating
the risk of additional costs resulting from potential failure of the existing generator.
Discussion: The existing generator at CHDRC was installed in 1983 with a limited capacity of 175kW. The unit is at end of life, and spare parts are no longer available for
ongoing service and maintenance. In order to meet growing demand for backup power at this
facility, the replacement generator must be increased to 750kW capacity. This is partly due to the increased demand to maintain all key HVAC systems in the building, essential to maintaining a functional status as an emergency cooling and warming centre. The physical size of the new generator will require that it be mounted outdoors on a new concrete pad to be
located in a service area near the main arena entrance on the east side of the complex. The
scope of work includes removal and disposal of the equipment to be abandoned.
Staff explored opportunities to reduce backup power demands, but doing so would result in significant additional costs as internal power systems would then need to be re-wired between standard and backup power distribution. It is more practical and cost effective to size the
generator for the peak demand of the building, and allow for operation the entire facility on grid or backup power, while monitoring and managing energy use through the City’s Building Automation Systems. Quick connect ports will also be provided to allow for the new generator to be offline during major maintenance, or to be supplemented with a secondary portable generator in case of a major crisis, emergency or extended repair.
The new generator will also be fueled by natural gas, which has proven to be more reliable in case of interference with diesel fuel delivery services, as occurred during the 2013 ice storm. This change will also eliminate the risks associated with storing large volumes of diesel on site. Natural gas lines already feed the recreation complex and run in proximity to the proposed location to the new equipment. Upgrading capacity will be required, and will be completed by
Enbridge, who will recover the expense through increased natural gas consumption. No capital
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Subject: CHDRC Generator Replacement Page 4
costs will be incurred for this upgrade, which can be also be coordinated with the final stages
of the water main replacement work started in 2021 in the same area, avoiding the need to cut
open freshly paved asphalt.
An outdoor generator will require an acoustic enclosure to mitigate noise generated during operation. This was not allowed for in the original budget and added costs to the project, but is required to meet noise thresholds which were specifically reviewed and considered during
design work for this project. Consulting costs noted in the financial summary include all fees to
date as well as contract administration costs to be incurred during construction.
Subject to receipt and approval of all submittals required, the proposal submitted by Elexicon Group, dated January 22, 2022, in the amount of $1,164,804.00 (HST included) is recommended for approval. The total gross project cost is estimated to be $1,469,904.00 and
the total net project cost is estimated at $1,323,694.00 (net of HST rebate).
Attachment:
1. Debenture By-Law
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:
Vince Plouffe Manager, Facilities Capital Projects
BD:vp
Recommended for the consideration of Pickering City Council Original Signed By:
Marisa Carpino, M.A. Chief Administrative Officer
Appendix 1 to Report OPS 14-22
The Corporation of the City of Pickering
By-law No. /22
Being a by-law to authorize Chestnut Hill Developments Recreation Complex – Generator Replacement project in the City of Pickering and the issuance of debentures in
the amount of $1,200,000.00
Whereas Section 11 of the Municipal Act, 2001, as amended, provides that a lower-tier municipality may pass by-laws respecting matters within the spheres of jurisdiction described in that Section; and,
Whereas Subsection 401(1) of the Municipal Act, 2001, as amended, provides that a
municipality may incur a debt for municipal purposes, whether by borrowing money or in
any other way; and,
Whereas Subsection 401(3) of the Municipal Act, 2001, as amended, provides that a lower-tier municipality in a regional municipality does not have the power to issue debentures; and,
Whereas The Regional Municipality of Durham has the sole authority to issue
debentures for the purposes of its lower-tier municipalities including The Corporation of the City of Pickering (the “City”); and,
Whereas the Council of the City wishes to proceed with debenture financing for the Chestnut Hill Developments Recreation Complex – Generator Replacement project;
and,
Whereas before authorizing the generator replacement in respect of the Chestnut Hill Development Recreation Complex – Generator Replacement project in the City of Pickering, the Council of the City had the Treasurer update the City’s Annual Repayment Limit, the Treasurer calculated the estimated annual amount payable in
respect of such project and determined that such annual amount would not cause the
City to exceed the updated limit and therefore, the Ontario Land Tribunal (OLT) approval is not required as per Section 401 of the Municipal Act, 2001, as amended, and the regulations made thereunder; and,
And whereas after determining that the Ontario Land Tribunal approval is not required,
the Council of the City approved report OPS 14-22 on the date hereof and awarded the
Chestnut Hill Development Recreation Complex – Generator Replacement project in the City of Pickering.
BY-LAW NO Page 2
Now therefore the Council of The Corporation of the City of Pickering hereby enacts as follows:
1. That the City proceed with the project referred to as the “Chestnut Hill Developments
Recreation Complex – Generator Replacement”; and,
2. That the estimated costs of the project in the amount of $1,323,694.00 be financed as follows:
a) That the sum of $1,200,000.00 be financed by the issue of debentures by The Regional Municipality of Durham over a period not to exceed 10 years;
b) That the sum of $123,694.00 be funded from Property Taxes; and,
3. That the funds to repay the principal and interest of the debentures be provided for in the annual Current Budget for the City commencing in 2022 or such subsequent year in which the debentures are issued and continuing thereafter until the debenture financing is repaid.
By-law passed this 25th day of April, 2022
___________________________________ David Ryan, Mayor
___________________________________ Susan Cassel, City Clerk