ADMINISTRATIVE REPORT

Date: February 15, 2002
Author/Local: B.McLennan/7239

RTS No. 02554

CC File No. 1805

Council: March 5, 2002

TO:	Vancouver City Council
FROM:	General Manager of Engineering Services
SUBJECT:	Award of Contract 2002 - 01 for Construction of a City Receiving and Transfer Yard for Recyclables

RECOMMENDATION

A. THAT Council authorize an additional $100,000 in funding from the Solid Waste Capital Reserve to complete and improve the development of a receiving yard for Blue Box and apartment recyclables at 1100 East Kent Avenue South.

B. THAT Contract No. 2002 - 01 for construction of the recycling receiving yard at 1100 East Kent Avenue South be awarded to the low bidder meeting the contract requirements, Gemco Construction Ltd., for a total tender price of $448,996.00 plus GST; funding to be provided from the Solid Waste Capital Reserve.

C. THAT the General Manager of Engineering Services, in consultation with the Director of Legal Services, be authorized to enter into a construction services contract with Gemco Contracting Ltd., for Contract No. 2002 - 01, for the construction of the recycling receiving yard.

COUNCIL POLICY

On July 20, 1999, Council approved the development of a recycling receiving yard on City owned land at 900 - 1100 East Kent Avenue for Blue Box and apartment recyclables at a cost of $1,275,000 to be funded from the Solid Waste Capital Reserve.

All expenditures from the Solid Waste Capital Reserve require Council approval.

Construction contracts over $300,000 must be awarded by Council.

Contracts are awarded on the basis of best value for fee.

PURPOSE

The purpose of this report is to obtain Council approval for an additional $100,000 in capital funding from the Solid Waste Capital Reserve for development of a City owned recycling receiving yard, and to obtain Council approval to award Contract No. 2002 - 01 for the construction of the recycling receiving yard at 1100 East Kent Avenue South.

BACKGROUND

The City currently collects approximately 28,000 tonnes of recyclables each year from the Blue Box and Apartment Recycling Programs. All of this material is received by the City's Processing and Marketing (P&M) contractor, at a receiving yard provided by the contractor. Every 2 to 5 years the P&M contract is retendered to ensure that the City continues to receive best value for our recyclables.

In addition to processing and marketing the materials, the P&M contractor must provide a receiving and processing yard that can receive all of the collection vehicles and recyclables, and is located close to Manitoba Yards. When the contract has been retendered in the past, the most challenging item for bidders has been finding and obtaining suitable land to act as a receiving yard. To increase the number of competitive bids, Council approved the development of a City owned, contractor operated, receiving yard for Blue Box and Apartment recyclables in July of 1999. The estimated facility cost of $1,275,000 is to be funded from the Solid Waste Capital Reserve.

The Solid Waste Utility is self-financing. All operating and debt servicing costs are funded through user fees to homeowners. The Solid Waste Capital Reserve (SWCR) is used to stabilize the annual user fees. The SWCR was created to cover costs and liabilities surrounding the eventual closure of the Vancouver Landfill and to fund capital expenditures for solid waste projects.

DISCUSSION

The original scope of work for development of a City owned, contractor operated recycling receiving yard did not include supply and installation of a truck weigh scale. It is now recommended that supply and installation of a truck weigh scale be included in the development of the receiving yard, instead of having the P&M contractor supply the scale, to allow quick and seamless change of P&M contractors if and when required. Providing the scale will maintain day to day operation of the recycling receiving yard during a change of contractor, increase competition among P&M contractors bidding on the contract, anddecrease P&M contract costs by removing this cost from the contractors operation. Supply and installation of the scale was not included in the project budget and requires an additional $40,000 in capital funding. The increase in project scope and cost will be offset through reduced P&M contract costs.

When the project cost was estimated, a precise location for the recycling receiving yard at 900 - 1100 East Kent Avenue was not known. Now that the final overall site layout has been established, additional costs for construction of a portion of East Kent Avenue South and utilities for site servicing, have been identified. Construction of East Kent Avenue South will provide access and services to users of 900 - 1100 East Kent Avenue South. The cost of the street construction will be shared among the property users. The receiving yard budget did not anticipate the additional infrastructure costs and requires an additional $60,000 in capital funding. The consolidated overall site layout and additional infrastructure improves the value of the site, offsetting the additional $60,000 infrastructure costs.

Tenders for the construction of the recycling receiving yard at 1100 East Kent Avenue South (Contract No. 2002 - 01) were opened February 11, 2002. All tenders were checked for completeness and accuracy and any miscalculations in summation were corrected. Tabulations of the amounts bid (including GST) are shown below:

1.	Gemco Construction Ltd.	$480,425.72
2.	Tyam Construction	$482,379.54
3.	Con-West Contracting Ltd.	$505,691.63
4.	Delta Aggregates Ltd.	$512,142.66
5.	B. Cusano Contracting Inc	$531,944.13
5.	Ponte Bros Contracting Inc.	$536,831.84
7.	CAP Ventures Ltd.	$559,850.75
8.	Progressive Contracting Ltd.	$561,750.00
9.	Matcon Constructors	$568,705.00
10.	Jack Cewe Ltd.	$577,984.97
11.	Mission Contractors Ltd.	$581,534.93
12.	Double M Excavating Ltd.	$583,331.90
13.	Targa Contracting Ltd.	$588.095.54
14.	Imperial Paving Ltd.	$604,330.65
15.	JJM Construction Ltd.	$605,620.00
16.	GCL Contracting Inc.	$612,270.05
17.	Smith Bros & Wilson	$658,653.48

The low bid from Gemco Construction meets all contract requirements and is recommended as providing best value to the City.

FINANCIAL IMPLICATIONS

The capital funding previously approved for the purchase of land and development of the recycling receiving yard is $1,275,000 to be funded from the Solid Waste Capital Reserve. The projected cost for the land purchase and yard development, including supply of a scale and construction of roadway infrastructure, is $1,375,000, leaving a shortfall of $100,000.

Projected Costs
	$800,000	property purchase
	$575,000	yard development and infrastructure costs
	$1,375,000	total
Previously Approved
	$1,275,000	property purchase and yard development
Variance
	$100,000	shortfall

To fund this shortfall it is recommended that Council approve an additional $100,000 in capital funding from the Solid Waste Capital Reserve. The increase in scope and cost will be offset by higher revenues and improved land values.

The capital expenditure will be provided by funds previously approved from the Solid Waste Capital Reserve plus the additional funding requested in this report.

CONCLUSION

An additional $100,000 in capital funding from the Solid Waste Capital Reserve is required for development of the recycling receiving yard to proceed.

The additional funding is necessary to reduce the operating cost of the site and improve the site value. The increased project scope, for a recycling receiving yard at 1100 East Kent Avenue South, includes supply and installation of a truck weigh scale, and construction of a portion of East Kent Avenue South and related utilities.

Tenders for Contract 2002 - 01 construction of a recycling receiving yard at 1100 East Kent Avenue South have been reviewed, and staff recommend acceptance of the low bid from Gemco Construction Ltd.

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(c) 1998 City of Vancouver