Report to: General Committee                                                   Date of Meeting: June 12, 2006

 

 

SUBJECT:                          Award of Tender 028-T-06 Milmar Court Sanitary Sewer System

PREPARED BY:               Thomas Yeung, Project Manager

                                            Ivy Ho, Purchasing Supervisor

                                            Steve Andrews, Director of Asset Management

                                            Catherine Conrad, Town Solicitor

 

 

 

RECOMMENDATION:

THAT the report entitled “Award of Tender 028-T-06 Milmar Court Sanitary Sewer System” be received;

 

AND THAT Tender 028-T-06 Milmar Court Sanitary Sewer System be awarded to the lowest priced bidder, Safire Infrastructure Inc. in the amount of $136,400, exclusive of contingency and GST;

 

AND THAT a separate purchase order in the amount of $13,640 exclusive of GST be issued for contingency to cover any additional fees and that the Director of Asset Management be authorized to approved expenditure of this contingency amount up to the specified limit in accordance with the Expenditure Control Policy;

 

AND THAT Mitchell Hatt & Associates be retained to carry out the site supervision and contract administration for the construction of the Milmar Court Sanitary Sewer System at an upset limit of $15,000, exclusive of GST;

 

AND THAT the cost for construction, engineering and all related administration costs in a total estimated amount of $192,000 be front-ended by the Town from the Waterworks reserve and recovered from the benefiting property owners with appropriate interest;

 

AND THAT the Treasurer be authorized to investigate the option of long term financing of the Milmar Court Sanitary Sewer agreement, and future Section 391 of the Municipal Act agreements through the use of debentures;

 

AND THAT the Milmar Court Sanitary Sewer System proceed and the total project cost in the estimated amount of $192,000 be recovered by imposing an equal fee against each of the property owners abutting the works in accordance with Section 391 of the Municipal Act 2001;

 

AND THAT the actual construction cost, all the engineering and related administrative and financing costs front-ended by the Town form part of the total project cost and be recovered in accordance with the requirements of Section 391 of the Municipal Act and the by-law approved by Council;

 

AND THAT the necessary by-law to levy the associated cost by property for the Milmar Court Sanitary Sewer System be prepared in accordance with the requirements of Section 391 of the Municipal Act 2001;

 

AND THAT the residents be allowed to have the option to pay the full amount at the time of the completion of work or over 15 years on their tax bill with interest payable at the 15 Year Region of York Debenture Interest Rate.

 

EXECUTIVE SUMMARY:

Not applicable


1. Purpose                2. Background         3. Discussion             4. Financial         5. Environmental

 

6. Accessibility       7. Engage 21st             8. Affected Units       9. Attachment(s)

 

 





Milmar Court is a small cul-de-sac south of John Street and west of German Mills Road (Attachment “A”). It has a total of eight houses built on large sized lots. Because of the area’s geography, these houses are served only by municipal water and individual septic system, except the two houses (#1 and #4) abutting German Mills Road that are connected to the sanitary sewer on German Mills Road.

 

Most of the septic systems in this cul-de-sac are more than 25 years old and some have experienced failure.  In early 2004, residents requested the Town to investigate the feasibility of installing a sanitary sewer system to serve the area.  It was agreed that the Town would investigate the possibility of installing a gravity sewer on Milmar Court to connect to the existing sanitary sewer on German Mills Road, with the understanding that the residents will pay the full cost.

 

Expression of Interest

An “Expression of Interest to Install Sanitary Sewers on Milmar Court” dated October 1, 2004 was received by the Town. It was signed by 5 out of the 6 property owners that are still served by septic system (# 6, 7, 9, 11 and 15. Owner of #10 did not sign). The residents requested the Town install a sanitary sewer on Milmar Court so that the existing septic systems can be abandoned. The residents also acknowledged that they are required to pay for the full cost of the work. 

 

Detailed engineering survey and design revealed that it is feasible to install a gravity sewer to serve the main floor of #6, 7, 9 and 11 and to serve # 10 and 15 by grinder pump systems (Attachment “B”)

 

 

 

Tendering of the Milmar Court Sanitary Sewer System

In order to provide the residents of Milmar Court with the up to date total project costs, the report entitled “Milmar Court Sanitary Sewer System” was prepared by Staff dated February 20, 2006 seeking Council authorization to tender the work in March 2006.

 

 

 

Construction Tender

All bids were issued in accordance with Purchasing by-law 2004-341. 

 

BID INFORMATION:

Advertised

Electronic Tendering Network

Bids closed on

March 22, 2006

Number picking up bid documents

20

Number responding to bid

8

 

Company

Prices

Safire Infrastructure Inc.

$136,400.00

Dig-Con International Limited

$138,662.00

Co-X-Co Construction Ltd.

$161,000.00

Hollingworth Construction Co.

$164,708.50

Esposito Bros. Construction Ltd.

$183,598.14

HugoMark Construction Inc.

$195,294.00

Sam Rabito Construction Ltd.

$217,030.00

Kenco Construction Ltd.

$258,380.00

Note: Prices are exclusive GST and contingency

 

Total Project Costs

Using the lowest tendered prices, the estimated total project costs are summarized below:

 

Construction

$136,400.00

Construction (Contingency Allowance)

$13,640.00

Engineering Fees (Design)

$15,800.00

Engineering Fees (Site Supervision/Contract Administration)

$15,000.00

Engineering Fees (Material & Compaction Testings)

$7,500.00

Administration Cost (Town Staff)

$2,660.00

Administration Cost (Tendering, Advertising, Notices, etc)

$1,000.00

Total Project Costs

$192,000.00

Note: Prices are exclusive GST

 

 

 

 

Meeting with Residents

A meeting with the residents of Milmar Court, attended by Councillor Erin Shapero, Catherine Conrad and Thomas Yeung was held on May 15, 2006. The final design drawing, total project costs, funding, method of cost sharing and the method of payment were presented to the residents in the meeting.

 

 

The total project costs are estimated to be $192,000, exclusive of GST. This includes the cost of construction and engineering fees. This does not include the resident’s cost of connection on their private property.

 

            If approved by Council, the Town will front-end the project cost with funding from the Waterworks Reserve and recover the cost from the six property owners.

 

            Resident may request the Town to proceed under the Local Improvement Act or under Section 391 of the Municipal Act.

 

            Under the Local Improvement Act, cost sharing will be based on the length of frontage of each property.

 

            Under Section 391 of the Municipal Act, the project cost could be equally shared by the six property owners for approximately $32,000 each.

 

If approved by Council, residents may pay back the Town for their share of the cost by a one-time lump sum payment or by instalments over 15 years.

 

Residents were advised to submit a formal request to the Town to initiate the installation of the sanitary sewer by signing the “Request for Construction of Sanitary Sewer” form.

 



The “Request for Construction of Sanitary Sewer” form was received by the Town in May 25, 2006. It was signed by four (4) out of the six (6) property owners (# 6, 7, 9, 11 signed, #10 and 15 did not sign).   

 

Based on the “Request for Construction of Sanitary Sewer” form provided to the Town (Attachment “C”), it is recommended that the Town proceed with the Milmar Court Sanitary Sewer System and recover the costs of such works in accordance with Section 391 of the Municipal Act.

 

 

 

FINANCIAL CONSIDERATIONS:

If the Town proceeds with the work as requested, it would be appropriate to recover the estimated cost of $192,000 exclusive of GST by imposing an equal fee against the six property owners benefiting from the works in accordance with Section 391 of the Municipal Act.

 

The project can be funded from Waterworks reserve and paid back with the appropriate interest.  The residents would have the option to pay the full amount at the time of the completion of work or amortized over 15 years with equal payments annually on their tax bill with interest payable at the 15 Year Region of York Debenture Interest Rate.  It should be noted that there will be no opportunity to pay down the cost of the project earlier once the opportunity to pay the entire amount up front, without interest, has expired.

 

Potential Debenturing

The use of the Town’s reserves for long term financing is being reviewed by the Finance Department.  Accessing Section 391 of the Municipal Act precludes the Town from recovering more that actual costs.  There is minimal risk for short term fees and charges, but the use of Town reserves for long term financing carries an element of financial risk.  For example, committing Town’s reserve funds to a rate of return equal to the Region’s 15 year debenture rate may carry some risk.  It is possible that money market rates could increase beyond the 15 year debenture rate, therefore the Town’s money is tied up in an investment that is earning less, thereby losing potential revenues. 

 

Alternatively, the Town may wish to use external debentures to stabilize the financial risk.  Borrowing funds at the 15 year debenture rates and structuring repayment schedules accordingly will minimize any financial risk to the Town. Staff recommend that the Treasurer be directed to investigate the potential of debenturing the costs of Section 391 agreements, including the Milmar Court Sanitary Sewer and Cachet Estates and Glenbourne Park Subdivision Water Distribution projects.

 



Not applicable

 

ENVIRONMENTAL CONSIDERATIONS:

By eliminating the existing septic system and replacing with the sanitary sewer system, the potential of spillage of raw sewage into the nearby German Mills Creek will be avoided and enhance the overall environment.

 

ACCESSIBILITY CONSIDERATIONS:

Not applicable

 

ENGAGE 21ST CONSIDERATIONS:

Not applicable

 

BUSINESS UNITS CONSULTED AND AFFECTED:

The Clerks Department and the Legal Department have been consulted, provided input and reviewed this report.  The Finance Department has reviewed and concurred with this report.  Should Council approve this project, the Legal and Finance Departments will be required to prepare the appropriate by-law with all the terms and conditions in accordance with Section 391 of the Municipal Act 2001.

 

 

RECOMMENDED

 

                            BY:    ________________________          ________________________

                                      Steve Andrews, P.Eng.                       Catherine M. Conrad,

                                      Director of Asset Management            Town Solicitor

 

 

                            BY:    ________________________         

                                      Jim Sales,

                                      Commissioner of Community and Fire Services