Vancouver City Council |
ADMINISTRATIVE REPORT
Date: July 5, 2004
Author/Local: Piet Rutgers/8463RTS NO. 04413
CC File No. 1602
Meeting: July 20, 2004
TO:
Vancouver City Council
FROM:
General Manager of Parks and Recreation in consultation with the Director of Financial Planning and Treasury
SUBJECT:
Capital Construction Cost Escalation
RECOMMENDATION
THAT Council set up a $1,041,000 Park Board cost escalation fund with source of funding to be the payment from TransLink related to the Eburne land purchase, subject to the Park Board reserving $1,041,000 for the acquisition of parkland in the Marpole area.
CITY MANAGER'S COMMENTS
The City Manager recommends the foregoing.
POLICY
Council approves Park Board Capital budget.
BACKGROUND
In April Council was made aware of cost escalation in a number of City and Park Board capital projects. Council approved additional funding allocations for Park Board projects and authorized the #1 Kingsway project to proceed to tender with a report on funding to be brought back once final costs are known.
DISCUSSION
Over the last month Park Board has received tenders back on a number of projects. In each case, tenders exceed the funding available in the capital budget. The cost escalation in the construction industry continues to be a significant factor. According to industry reports form concrete has risen from $5 to $12 per ft2, plywood has risen from $25.00 to $50.00 per sheet inthe last year. Steel has been a particularly significant factor with price increases of 70% reported in the last three months alone.
Concrete and steel are significant components in the Killarney Pool project which has drawn tenders of $9.3 million, $1.1 million over the construction budget allowance in the capital budget.
Park Board staff, consultants and the Killarney Community Association have been working on various options to bring actual costs in line with funding, including reducing the quality of finishes, deferring certain items, and foregoing energy saving features. While the project could proceed with a number of these changes, staff believe that it is in the City's long term interest to see the project completed with a minimum number of these reductions especially those affecting sustainability. Park Board staff are presently negotiating with the Killarney Community Association to finalize their contribution to the project.
The Park Board Victory Square project requires an additional funding up to $70,000 and the Queen Elizabeth Reservoir project is out to tender at the time of writing.
In the context of the 2003 - 2005 Capital Plan staff have identified TransLink's Eburne Land contribution of $1,041,000 as an addition to parks and recreation capital funds. At the facilitation workshop held in April, the consensus was reached "THAT, the participants of the April 17th meeting agree that it would be desirable for the TransLink payment-in-lieu to be dedicated to parkland acquisition in Marpole." The intent of this recommendation can now be addressed. It is proposed that the Park Board reserve $1,041,000 from its existing land acquisition funds for parkland acquisition in Marpole. This guarantees the community a continuity of funding for park land in Marpole. With this commitment to future land purchase in Marpole, the TransLink funds can be allocated to provide additional funding for Park Board capital projects, which the Board can access to maintain the essential features of its capital works program.
The Park Board will consider this request and establishment of the Marpole Land Acquisition allocation at its July 19 meeting. Council will be advised of the Board's decision prior to considering this report , including the Board's proposed allocation of the funds.
CONCLUSION
The cost escalation in the construction industry continues to challenge a number of Park Board capital works projects. This report seeks authority for the allocation of additional parks and recreation funding to the Park Board to address this problem.
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