FINANCE & ADMINISTRATIVE COMMITTEE

 

 

 

 

 

TO:

Mayor and Members of Council

 

 

 

 

FROM:

Paul Ingham, General Manager, Operations

 

 

 

 

PREPARED BY:

Mark Ingwersen, Manager, Parks Maintenance

 

 

 

 

DATE OF MEETING:

September 20th, 2004

 

 

 

 

SUBJECT:

Greenhouse Construction

 

 

 

RECOMMENDATION:

THAT the staff report entitled “Greenhouse Construction”, dated September 20th, 2004, be received;

 

AND THAT staff be authorized to proceed with the Greenhouse Construction project in the fall of 2004.

 

AND THAT funding for this project, to an upset limit of $70,000, be provided for from closed capital projects, to be identified in the 2004 update on the status of capital projects.

 

PURPOSE:

This report has been prepared to advise Council of the long term financial benefits associated with the construction of an additional greenhouse to accommodate the planting of streetscape barrels and baskets in-house, as opposed to out sourcing a portion of this service.

 

BACKGROUND:

The Town of Markham developed the Streetscape Program in the mid 1970s, and built the first greenhouses in 1986.  Since that time, a number of surrounding municipalities have implemented similar programs, although none on the same scale as the Town of Markham’s.  Currently, Aurora and Newmarket grow their baskets and barrels, Richmond Hill grows their own in rented greenhouse space and Vaughan grows approx. 20% of their baskets and barrels and contracts out the remainder.  Both Richmond Hill and Vaughan indicated that the reason they contract out or rent space is because of a lack of space at their current facilities to install greenhouses.

 

Through 2002 and 2003, the Town of Markham ‘Streetscape Program’ expanded by 651 baskets/barrels thereby increasing the total number required Town wide from 1,451 barrels and baskets in 2001, to 2,102 in 2004. 

 

The Parks Department currently operates four greenhouses, located at the Central Parks Shop on 14th Avenue.  Through the reorganization of the existing greenhouses and the potting shed to maximize use of available space, the Parks Department is now able to accommodate a total of 1,752 baskets/barrels.  The greenhouses and the potting shed are at maximum capacity and due to a lack of space, 350 baskets were contracted out for planting and growing in both 2003 and 2004.

 

OPTIONS/DISCUSSION:

Cost of contracting planting and growing service

In 2004, 350 baskets were contracted out for planting at a cost of $45,000, which included $7,000 for the cost of plant material.  As the cost for plant material is incurred whether the baskets and barrels are contracted out or planted in-house, the current net cost of this non-budgeted contracted service is approximately $38,000 per year.  The planting of the baskets/barrels in-house can be undertaken by the existing Parks Maintenance staff. The only impact on current operating costs are the utility costs noted below. 

 

Estimated cost of new greenhouse

The estimated initial cost to expand the greenhouses at Central Parks Shop is approximately $70,000.  Included in this cost is construction of a fifth greenhouse as well as the extension of the potting shed. This is necessary for the connection of the new greenhouse to the potting shed and the existing greenhouses to allow plant materials to be transferred between the potting shed and the greenhouses without having the plant materials exposed to the cold elements in late winter and early spring.  Annual cost associated with the operation of the new greenhouse, including all utilities (i.e. gas, hydro, etc), is approximately $4,000.  The estimated life cycle for greenhouses is approximately 25 years.

 

FINANCIAL CONSIDERATIONS:

The following table outlines the potential savings that can be realized through the construction of the proposed greenhouse expansion.

 

 

 

 

 

 

 

 

 

 

* - Excludes $7,000 of plant material costs that would be incurred in both Options 1 or 2.

 

As shown above, the construction of the greenhouse expansion would result in net annual savings of approximately $34,000.  Based on estimated Greenhouse construction costs of $70,000, the Town is projected to recover the Capital cost of construction in just over 2 years.  Over the life the greenhouse, 25 years, the projected savings (excluding growth and inflation) is estimated to be $780,000 ($34,000 per year * 25 years less initial greenhouse cost of $70,000). 

 

In addition, the total capacity of the proposed additional greenhouse will be 430 barrels/baskets (80 barrels/baskets over the 350 units currently contracted out) resulting in a total capacity (existing and proposed greenhouses) of 2,182 barrels and baskets.  The excess capacity of 80 units can accommodate an expanded Streetscape Program and/or basket & barrel requests for Communities in Bloom (excluding cost of plant material).

 

Operations department staff believe that existing gardeners and the additional gardener included in the 2004 Operating budget can adequately handle the workload on an additional greenhouse.  Thus, there are no additional personnel requirements arising from this project.

 

In order to proceed with the Greenhouse Construction project in the fall of 2004, the Operations Department recommends that funding for this project, to an upset limit of $70,000, be provided for from closed capital projects, to be identified in the 2004 update on the status of capital projects.

 

 

 

 

 

 

 

 

 

Paul Ingham,

General Manager, Operations

 

Peter Loukes, P. Eng.

Director, Operations and Asset Management

 

 

 

 

Jim Sales,

Commissioner of Community & Fire Services

 

 

 

 

 

 

 

Q:\Commission Share\Operations and Asset Management\Reports\2004\Operations\Greenhouse Report\Greenhouse Report revised.doc