Report to: General Committee                                              Date of Meeting: January 22, 2007

SUBJECT:                          Birchmount Road Extension - 14th Avenue to Enterprise Drive  - Project Update

PREPARED BY:               Allan Arbuckle, Manager of Infrastructure & Capital Works

RECOMMENDATION:

THAT the report dated January 22, 2007, entitled “Birchmount Road Extension 14th Avenue to Enterprise Drive – Project Update” be received;

AND THAT staff be authorized to proceed with the tendering of the first phase of the Birchmount Road extension from Enterprise Drive south to the CN rail line,

AND THAT staff be authorized to continue negotiations with CN Rail to reach an Agreement regarding the Town constructing the railway grade separation and related works.

AND THAT in the event that staff are unable to reach an agreement with CN Rail by March 30th 2007 regarding the Town constructing the railway grade separation, staff be authorized to apply to the Canadian Transportation Agency for approval for the Town to proceed with the tendering and construction of the railway grade separation

AND THAT staff be authorized to retain outside legal counsel if required to assist in the application to the Canadian Transportation Agency in an amount not to exceed $50,000 exclusive of GST ($53,500 inclusive of GST);

AND THAT staff be authorized to extend the contract with Totten Sims Hubicki to revise the design drawings and tender specifications to accommodate the phased construction of the Birchmount Road extension in an amount not to exceed $60,000 exclusive of GST ($64,200 inclusive of GST) in accordance with Purchasing By-Law 2004-341, Part II, Section 7 (1) (c) which states “when the extension of an existing contract would prove more cost-effective or beneficial”;

AND THAT the legal and additional consulting costs be financed from the Engineering Department Capital Budget (Account #83-5399-3748-005).

AND THAT staff be authorized and directed to do all things necessary, including the execution of documents, to give effect to the above.

EXECUTIVE SUMMARY:

Due to Canadian National Railway position that they want to construct the grade separation of their rail line, staff  recommend the contract be placed to enable the Markham District Energy Plant and storm water management facility to proceed in 2007.

Staff will continue negotiations with Canadian National and if necessary appeal their decision to the Canadian Transportation Agency.

FINANCIAL CONSIDERATIONS:

The current estimated cost for the entire Birchmount Road extension project including the property acquisition costs is approximately $23 million consisting of the following components

Project Cost

Item

Cost excluding GST

Construction Cost

± $14,700,000

Utility relocations

± $750,000

Markham District Energy

± $1,800,000

Professional Fees incl. design, construction inspection & contract administration fees

± $1,420,000

Property Acquisition

±$3,300,000

Engineering Department Project Management Fee @ 3.8%

± $659,100

Total Estimated Project Cost

± $22,629,100

Project Funding

Item

Funding excluding GST

Existing Funding (83-5399-3748-005; 83-5350-6114-005; 83-5350-6741-005; 83-5350-7330-005)

$1,975,000

2007 Budget Request (Project 7629)

$15,562,500

Estimated 2008 Budget Request

± $5,091,600

Total Estimated Project Funding

± $22,629,100

The estimated cost to construct Phase 1 of the project is ± $12,000,000.   The current Capital Budget as of November 30, 2006 has $1,420,510 balance remaining.  The 2007 Capital Budget plus carryover from 2006 has included an allowance of $16,983,010 for construction of the project.

The draft 2007 Development Charge will include the updated estimate for this project.  The Markham District Energy component of this project will be funded by Markham District Energy while Ruland Properties and Markham Centre Developers Group are responsible for the cost of the local road component of the project from Enterprise Drive to the north limit of Highway 407.  Separate agreements with the other funding partners are to be finalized at the tender award stage

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

5. Others (Environmental, Accessibility, Engage 21st, Affected Units)             6. Attachment(s)

PURPOSE:

The purpose of this report is to update Council on the current status of the Birchmount Road extension project, to obtain authorization to proceed with the tendering of the first phase of construction, to continue negotiations with CN Rail regarding the Town constructing the railway underpass structure and if necessary, to apply to the Canadian Transportation Authority.

BACKGROUND:

Birchmount Road is a four lane major collector roadway which currently ends at 14th Avenue. The road continues north from 14th Avenue as Teckbridge Drive terminating at Royal Crest Court as shown on Attachment “A”. The Transportation Study prepared for the Markham Centre Secondary Plan recommended that Birchmount Road be extended to provide a continuous mid-block collector between 14th Avenue and Highway 7.

In 1996, an Environmental Study Report was undertaken by the Town to examine alternative methods of completing the Birchmount Road extension and to select a preferred design option. In June of 2004, the Town retained the consulting firm of Totten Sims Hubicki Limited to prepare the detailed design for the Birchmount Road extension from 14th Avenue to the southerly limit of the Remington Group’s Markham Centre lands at Highway 407. In March of 2006, the Town assumed responsibility for completing the detailed design, securing the approvals and constructing the section of the road from Highway 407 north to Enterprise Drive crossing the Remington lands in accordance with Council’s direction of January 22nd 2006.

The major items of construction required to complete the Birchmount Road extension include:

·            The construction of 900 meters of new four-lane collector road from Royal Crest to Enterprise Drive.

·            The reconstruction of 500 metres of existing roadway from 14th Avenue to Royal Crest Drive.

·            The relocation and upgrading of the existing Concanmar stormwater management pond to provide quantity and quality control.

·            The construction of a new underpass structure and associated retaining walls at the CN Rail line.

·            Minor modifications to the existing Highway 407 underpass structures to accommodate the road construction.

·            Construction of underground services including storm sewers, sanitary sewer, watermains and utilities.

·            Construction of district heating and cooling systems from the heating and cooling station from Enterprise Road to the future generation plant in ORC lands.

·            Modifications to the existing intersection of 14th Avenue and Birchmount Road.

The design of the road has now been completed and twelve of the fourteen required approvals, agreements and property acquisitions necessary to construct the project have been received. The two exceptions are the final approval from ORC and CN Rail. Negotiations with both parties have been ongoing since 2004 and while permission to enter the ORC lands to construct Birchmount Road and the associated pond works is expected to be received in March, agreement with CN Rail on a number of key issues as described in the following sections of this report remains outstanding. It is anticipated that resolution of these CN issues may take a further 6 to 8 months to finalize.

OPTIONS/ DISCUSSION:

CN Rail Issues

The design of the railway structure has been carried out by the Town’s consultant in accordance with CN standards and has been reviewed and approved by CN. Town staff are proposing that normal practice be followed and that the underpass structure construction be included as part of the Town’s Birchmount Road construction contract with the Town providing inspection, contract administration and project management for the project. Under this arrangement, CN Rail would have the right to approve the Town’s consultant and contractor involved in the bridge construction and to retain an independent engineering firm at the Town’s expense to provide quality control/quality assurance services directly to CN to ensure the railway’s standards are met. This approach provides the Town with overall responsibility for the project including cost and scheduling control. Although this approach has been used successfully in the past, CN is now insisting that the construction of the underpass structure be undertaken by CN with the tendering, inspection, contract administration and project management of the construction contract to be carried out by CN staff with the Town responsible for the total cost of the work.

Engineering staff have expressed serious concerns with the Railway’s position with respect to control of the underpass structure construction. These concerns arise from past situations where the Town has been unable to exert any effective control over the operations of contractors not directly employed by the Town and as a result, has incurred significant additional costs in the form of design changes, construction cost overruns and scheduling delays. To avoid a repeat of these situations, Markham Council directed staff in September 2005 to require that all contractors engaged to perform works for outside agencies on Town projects be retained directly by the Town or alternatively, that the external agency be solely responsible for any cost overruns or scheduling delays resulting from the actions of contractors under their control. While CN has agreed to involve the Town in the construction process, they have not agreed to these conditions.

Staff  are continuing discussions with CN to resolve these issues. If agreement cannot be reached by the spring of 2007, the construction of the bridge may be further delayed beyond the current proposed 2008/2009 construction timeframe.

The Canadian Transportation Act contains provisions which allow parties to apply to the Canadian Transportation Agency (CTA) in cases where an agreement on construction, maintenance or cost issues for road crossings of rail lines cannot be reached with the Railway. Staff are requesting authorization by Council to make application to the CTA to permit the Town to construct the Birchmount Road underpass if an acceptable agreement with CN cannot be reached by March 30 2007,  a timeframe that would allow construction to proceed in 2008.

Staff are also requesting authorization by Council to retain outside legal counsul, if required,  to assist in the preparation and presentation of information to the CTA, if required.

Markham District Energy Requirements

Markham District Energy (MDE) is proposing to construct a new district energy plant on Ontario Realty Corporation lands located south of Highway 407 adjacent to the proposed Birchmount Road extension. The construction of this plant, which is required to service Markham Centre developments, is scheduled to commence in the fall of 2007 for completion in late 2008. The construction of Birchmount Road from Enterprise Drive southerly to approximately the north limit of the rail line is required to provide access to the plant and to allow for the installation of MDE distribution piping.

Project Phasing.

The original schedule for construction of the project called for all Agreements to be in place by October 2006, tendering of the construction contract to take place in late 2006/early 2007 and construction to start in the spring of 2007. Construction of a critical component of the project, the relocation of Concanmar pond, is subject to a number of conditions imposed by the Toronto and Region Conservation Authority (TRCA) and the Federal Department of Fisheries and Oceans (DFO) which require the work to be carried in a particular sequence and within the period from June 15th to September 30th. In order to meet these timing and construction sequencing restrictions, the Birchmount project must be tendered in early February of this year or be delayed a full year.

It is likely that Agreement with CN for the construction of the rail crossing will not be reached in time to allow the construction of the grade separation to proceed in 2007. In order to meet the schedule requirements of MDE, TRCA and DFO, staff are proposing to proceed with the construction of the project in two phases. Phase 1, which will include the relocation of the Concanmar pond and the construction of Birchmount Road from Enterprise Drive southerly to approximately the north limit of the CN railway line is proposed to proceed in 2007 to meet MDE’s proposed start date for construction of the District Energy plant in the fall 2007. The second phase of the project, the construction of the CN Rail grade separation and the extension and reconstruction of Birchmount southerly to 14th Avenue, is proposed to commence in 2008 assuming the outstanding CN Rail issues are resolved during 2007. Based on this project phasing, it is anticipated that Birchmount Road from 14th Avenue to Enterprise Drive will be open to traffic by mid 2010.  The modifications to design drawings and tender specifications to accommodate the phased construction will be through an extension of the existing contract with Totten Sims Hubicki since they had done the original designs and it will be more cost-effective than hiring a new consultant.

Agreements and Approvals

All agreements and approvals which are required to permit construction of the first phase of the Birchmount Road, including the Remington Group, 407 ETR, Ministry of Transportation, Ontario Realty Corporation and Hydro One have either been received or have proceeded to the point where it is anticipated that they will be received either prior to the scheduled tendering date for the contract in February 2007 or prior to award of the contract.  A summary of the project approvals are enclosed as Attachment “B”.  Staff will update Council on any outstanding approvals/agreements at the tender award stage.

Property Acquisition

A total of 13 property easements and acquisitions are required in order to construct the Birchmount Road extension. While the majority of these acquisitions are minor widenings or easements along the existing section of roadway between 14th Avenue and Royal Crest Drive, the acquisition of approximately 5 ha. of land owned by the Ontario Realty Corporation (ORC) located between the CN rail line and Highway 407 is required to construct the stormwater management pond and phase 1 of the road works. Discussions with ORC over the past 2 years have progressed to the stage where it is anticipated that permission to enter the lands and construct the required works will be in place before the award of the contract and prior to the finalization of an agreement to purchase the property. Negotiations to resolve outstanding issues regarding this Agreement including the determination of the final value of the property, which is currently valued by ORC at approximately $1.8 million, are ongoing.

FINANCIAL TEMPLATE:

Not Applicable

BUSINESS UNITS CONSULTED AND AFFECTED:

The Finance and Legal Departments have reviewed this report and their comments have been included.

.

RECOMMENDED BY:

________________________                                    ________________________

Alan Brown, C.E.T.                                                      Jim Baird, M.C.I.P., R.P.P.

Director of Engineering                                     Commissioner, Development Services

ATTACHMENTS:

Attachment “A” – Site Location

Attachment “B” -  Summary of Project Approvals