Report to: General Committee Report
Date: March 01, 2010
SUBJECT: Delegation of Authority to
execute Release between the Town and Suncor Energy Inc. - Sanitary Sewer
Extensions in Thornhill Area (Contract 144-T-09)
PREPARED BY: Prathapan Kumar, Acting Manager of
Capital ROW, Ext. 2989
Lisa Riegel, Assistant Town Solicitor, Ext. 3582
RECOMMENDATION:
1)
THAT
the report entitled “Delegation of Authority to execute Release between the Town
and Suncor Energy Inc. - Sanitary Sewer Extensions in Thornhill Area (Contract
144-T-09)” be received;
2) AND THAT the Mayor and Clerk be authorized
to execute the Release between the Town and Suncor Energy Inc. in consideration
for cost reimbursements in the amount of $73,067, in a form satisfactory to the
Town Solicitor;
3)
AND THAT the Mayor and Clerk be authorized to
execute future releases that represent a reimbursement of costs by third
parties to the Town, upon approval of the applicable Commissioner or the Chief
Administrative Officer and in a form satisfactory to the Town Solicitor;
AND
THAT Staff be authorized and directed to do all things necessary to give effect
to this resolution.
EXECUTIVE SUMMARY:
Not Applicable
The purpose
of this report is to seek Council’s approval to execute the Release between the
Town and Suncor Energy Inc.
As part of the Waterworks Department’s effort to
improve the capacity of the local sewer system in the Baythorn area of Thornhill,
sanitary sewer extensions were carried out along Colonsay Road and Silver Aspen Drive. The contract was awarded to Tedescon
Infrastructure in June 2009, and construction work commenced in August 2009.
While
excavating for the installation of the sanitary sewer, contaminated soil was
found within the trench (approximately 40 metres in length) at the intersection
of Silver Aspen Drive/Colonsay
Road (refer Schedule “A”). Lab tests (conducted by the Town’s
consultant, Trow Associates Inc.) indicated that the soil was contaminated with
petroleum hydrocarbon and benzene (refer Schedule “C”). A total of 1040 tonnes of contaminated
material was removed and disposed at an approved dump site as per Ministry of Environment
requirements.
Investigation
revealed that the likely cause of the soil contamination was due to an abandoned
fuel oil distribution system owned by Gulf Oil Company. Gulf Oil Company was acquired by Petro Canada, which
amalgamated with Suncor Energy Inc.
Staff
contacted Suncor Energy and requested them to reimburse the additional costs
incurred by the Town due to the presence of contaminated soil, in the amount of
$89,626.23 (which includes additional costs associated with work stoppage,
testing, removal/disposal of contaminated soil,
backfill, and additional contract administration). Suncor Energy acknowledged
that the abandoned oil supply lines were the likely cause of the contaminated
soil and, following negotiations with Asset Management Department, agreed to
reimburse the majority of the additional costs incurred by the Town, in the
amount of $73,067.30, in order to settle this matter. In return, Suncor Energy requested that the
Town execute a release.
The form of
release attached to this report as Schedule “B” (the “Release”) has been
reviewed and approved by the Town’s Legal Department. The scope of the Release has been reduced
significantly from the form of release originally requested by Suncor Energy. The Release is limited to the costs
associated with the removal and offsite disposal of petroleum hydrocarbon and
benzene contaminated soil located at the sites identified by the Town’s
consultant in connection with Contract 144-T-09. The Release does not preclude the Town from
pursuing a claim against Suncor Energy for any costs, expenses, damages, etc. outside
of this limited scope as a result of the presence of contaminated soil.
Since no
delegated authority has been approved by Council to execute a release of this
nature on behalf of the Town, Staff requests Council to authorize the Mayor and Clerk to execute
the Release between the Town and Suncor Energy Inc. in a form satisfactory to
the Town Solicitor; and the Mayor and Clerk to execute future releases that represent a reimbursement
of costs by third parties to the Town, upon approval of the applicable
Commissioner or the Chief Administrative Officer and in a form satisfactory to the
Town Solicitor.
Shortfall of $16,344 driven primarily by the
difference between Town’s cost to clean up the contaminated soil ($89,626.23)
and reimbursement from Suncor ($73,067) and will be funded
from budget allocated within project 9278 for construction of 3 siphon
maintenance chambers in Woodbine area
($150,000 available).
Not applicable
Not applicable
The Legal Department has been consulted, provided
input and reviewed this report.
Schedule “A” - Key Plan
Schedule “B” - Release
Schedule “C” - Lab Test Report