ADMINISTRATIVE REPORT
Date: November 30,1995
Dept. File No. 190 739
TO: Vancouver City Council
FROM: General Manager of Engineering Services
SUBJECT: Relocation of Asphalt Plant and Aggregate Handling
Operations
RECOMMENDATION
A. THAT Council approve the relocation of the Aggregate
Handling and Asphalt Plant operation from the Cambie Yard
to a new Yard on the Fraser River.
B. THAT a new Works Yard design include a recycling facility
for aggregate, asphalt, and concrete.
C. THAT to cover the land cost of a new Fraser River site,
Council approve the disposal of the Sterling Shipyard and
Commissioner Yard. A shortfall, if any, would be funded
from the aggregate/asphalt operations through a loan from
the Solid Waste Fund.
D. THAT a preliminary project budget, estimated at $13.3
million, be established for the design, construction and
commissioning of the new Works Yard and the updated project
budget and financing plan will be reported back to Council
for approval after the preliminary design is completed.
E. THAT Council approve $150,000 from the Project Budget and
authorize the General Manager of Engineering Services to call
for proposals and select consultants to carry out a
preliminary design for the new Works Yard.
COUNCIL POLICY
1. Council approved the south shore of False Creek as a let-go
industrial area in July 1990, and made provision for the
relocation of the land based operations from the Cambie Yard
through the purchase of the former Burlington Northern Rail
(BNR) Yards in the East False Creek Flats in 1992.
2. Council, in 1979, made provision for the future relocation of
the water-based aggregate operation and related asphalt plant
in Cambie Yard by securing the former Sterling Shipyard
property on Burrard Inlet.
3. On July 26, 1995, Council approved the relocation of the Fire
Training Facility from the Main Street site to the BNR yard,
and put a hold on the property at the south foot of Main
Street until Engineering Services reported back on its future
Yards plan.
PURPOSE
This report reviews a proposal for relocating City aggregate and
asphalt plant operations and recommends that a new aggregate and
asphalt facility, with expanded recycling capabilities, be developed
on a site on the Fraser River in order to realize major financial,
technical and operational gains for the City, in the short and long-
term.
SUMMARY
The Cambie Yard in False Creek will be planned and redeveloped to
non-industrial uses over the next few years. The current land-based
Yard Operations will be relocated, most likely to the proposed Yard
at the former BNR site, pending the results of a major yard study
which is expected by mid-1996. The water-based operations also
require relocation and this report proposes a relocation and
development process and a financing strategy.
A detailed study of the aggregate handling and asphalt plant
operation, identified major savings to the City by continuing
existing operations. Without a City-run operation, prices would be
subject to market forces and costs would increase. The study also
identified additional savings to be made by adding a construction
material recycling facility to the aggregate and asphalt plant
operation.
The costs for the relocation to the Fraser River are estimated at
$13.3 million for Yard development and $5.0 to $6.0 million for land.
The site at Main Street is owned in the PEF, and arrangements can be
made to secure it for yard use. It remains possible that an
alternative site might be located and final details on a preferred
site will be reported back in early 1996.
BACKGROUND
The proposed redevelopment on the South Shore of False Creek will
require the City's Cambie Works Yard to relocate. Property was
purchased in the former BNR Yard, to accommodate the land-based yard
operations. A site at the former Sterling Shipyard is being held for
the water-based aggregate and asphalt operation, but further review
identified potential community and site concerns as reasons not to
locate there. An alternate City-owned site on the Fraser River at
Main Street is available. Council recently approved the relocation
of the Fire Department's Training operation from the Main Street site
and put a hold on that site, subject to a report back on City yard
requirements.
The aggregate handling and asphalt plant operations are very
important components of the City's Capital and Maintenance Programs
for infrastructure. They provide an efficient (both in time and
dollars) materials supply and production facility dedicated to
serving Sewers, Waterworks, and Streets Operations. The estimated
400,000 tonnes of aggregate handled at the Yard each year are
purchased through a public tender process and costs are low because
of the high volume. Most of the aggregate materials are distributed
to work sites in a combination of City trucks and privately owned
hired trucks. Approximately 25% of the aggregate is used to produce
asphaltic concrete (asphalt) products for street construction and
repair.
Currently, the aggregate and asphalt plant operation employs three
full time staff and contributes to major savings in excess of $1.4
million per year, over contracted aggregate delivery and private
asphalt supply.
The aggregate operation works well, but can be improved with new
handling equipment. The asphalt plant, installed in 1967 with an
expected life of 25 years, has served the City well, but is
experiencing increased maintenance costs and cannot meet the peak
volume demands of the paving operation.
With the timing of development of False Creek, the condition of the
existing plant, and the need to be even more competitive, a
comprehensive review of the City's aggregate and asphalt operations
was done. The following discussion reviews current and future
demands for aggregate and asphalt, compares current practice to other
options for supply and production, and recommends continuing
operations in a new facility on the Fraser River.
DISCUSSION
A detailed study was done of the current and future aggregate and
asphaltic concrete needs of the City and how best to provide them.
The complete study is available from the General Manager of
Engineering Services and has been reviewed by Corporate Services, who
agree with the study conclusions. The study answered the following
questions:
(a) how do City operations compare to other aggregate suppliers,
asphalt suppliers and production options?
(b) how will City operations handle, and what changes are
necessary to meet, future demands?
(c) what other ideas could be implemented to reduce costs
and improve the efficiency of the operations?
The following sections summarize the study findings.
Aggregate Handling
Currently, because of the large demand for aggregate materials
generated by City operations, approximately 400,000 tonnes of
aggregate are purchased annually by the City through a public tender
process. The aggregate is delivered by barge to Cambie Yard, where
it is off-loaded and made available for pick up to all City
operations, including Parks and Recreation. Distribution from the
central facility is by trucks dispatched by the user branches.
The aggregate operation employs one equipment operator and one half
of a foreman. In the existing facility, trucks are required to off-
load some barges because there is insufficient handling equipment.
Barge deliveries are coordinated by Materials Branch staff, as
required. The low overhead and no profit requirement, make this
operation very competitive.
Numerous reviews have been done over the years that clearly indicate
the costs for aggregate materials and delivery are lower with a City
operation, than by private contract. An analysis of City versus
private aggregate supply and delivery to job sites, identified
savings (estimated at $750,000 annually) with the City operation.
The current volumes of material used in City operations will continue
into the future, given the requirements for infrastructure
construction and maintenance. The overall operation is efficient,
but could be improved. A new Fraser River Yard to replace Cambie
Yard, offers an opportunity to install new material handling
equipment and improve efficiency. Recycling of concrete rubble is
proposed to reduce dependency on new aggregate materials and this
option is discussed under Recycling.
Asphalt Production
The City produces approximately 100,000 tonnes of asphalt each year
in the existing plant. The Streets Operations Branch uses the
majority of the asphalt produced for new construction and
maintenance, and repair of streets. The plant employs one equipment
operator and one half of a foreman. As with aggregate supply, the
City is competitive in its asphalt operation due to the low labour
and equipment costs and the non-profit operation. In addition to the
benefits of low cost, there are benefits from the plant location
which give flexibility and quick response to demand.
The current costs to produce asphalt were compared with other
municipalities and private contractors. The lowest cost asphalt in
the region was in Matsqui (now Abbotsford), where the price is $35.60
per tonne, compared with our price of $28.86 per tonne at a new
facility. This conservatively translates to an annual saving of
$675,000 per year over private supply. However, local prices are
higher, in the range of $45.00 per tonne, suggesting real savings
over $1.5 million annually.
The analysis showed that the existing operation is extremely
competitive and that replacement of the plant and addition of
improved storage facilities, can make it even more so. Reduced
dependency on new aggregate through increased recycling of asphalt
would further reduce costs.
Recycling
During reconstruction operations, large amounts of concrete and
asphalt rubble are removed and disposed of at landfills. The
existing Cambie Yard site was too small and incompatible with the
adjacent residential uses, to allow comprehensive recycling of
construction materials. With the proposed relocation to the Fraser
River, a significant opportunity to re-use and recycle asphalt and
concrete and carry out limited soil and rubble separation, is
created. Waste asphalt can be reclaimed and added to new asphalt
mixes to reduce production costs by at least an estimated $350,000
per year.
Concrete rubble can be crushed into aggregate-sized particles to be
used as road base and trench fill. This would reduce our requirement
for aggregate materials, thereby saving the aggregate operation an
estimated $260,000 per year. In addition, savings in operations,
estimated at $560,000, could be realized through reduced trucking
costs and dumping fees currently spent to dispose of rubble at
landfills. The current tender award for mineral aggregate is
recommending a recycled concrete product.
A recycling operation re-uses materials, reduces space demand at the
landfill, reduces truck traffic in the region and is environmentally
sound business.
The savings identified above, are based on a thorough economic
analysis. In carrying out the comparative review with private
operations, market land lease rates were used to ensure that all
costs were accounted for. The Analysis Report, available from the
General Manager of Engineering Services, demonstrates that the
continuation of City-run aggregate and asphalt production operations
and the addition of a recycling capability, are in the best interest
of the City from operational, environmental, and economic
perspectives.
PROPOSED NEW YARD
Cambie Yard will soon be discontinued. The existing aggregate
handling and asphalt plant operations described above are efficient,
cost effective and provide best value to the City. For these
reasons, it is proposed that the City develop a new Work Yard on the
Fraser River to replace the water-based aggregate and asphalt plant
operations from Cambie Yard.
A proposed Fraser River Yard would accommodate the new asphalt plant
and associated storage facilities, improved aggregate handling and a
new recycling operation. A modernized materials testing laboratory
would also be accommodated. The preliminary design would identify
the site layout and geotechnical conditions, and refine the cost
estimates. It is recommended that consultants be selected and hired
at an estimated cost of $150,000 to carry out the design.
FUNDING
The conceptual estimate of the Capital Costs (excluding land) to
develop the new Aggregate and Asphalt Facility on either site is:
Asphalt plant $5,000,000
Aggregate handling 6,000,000
Recycling 2,100,000
TOTAL $13,300,000
It is suggested that funding could be provided from the Asphalt Plant
Equipment Reserve (current balance $3,200,000) and potentially a loan
from the Solid Waste Fund or some other element of private funding.
An updated cost estimate and financing plan will be reported back
after preliminary design is completed.
The Main Street site is owned in the PEF and could be available for
between $5.5 million to $6.5 million. The General Manager of
Engineering Services recommends that the Sterling Shipyard and
Commissioner Yard be marketed and that any shortfall in the land
purchase price be funded through a loan from the Solid Waste Fund, to
be repaid from the Asphalt Plant and Aggregate operation.
Commissioner Yard would continue to operate at its current location,
until it is relocated to the proposed new yard at the BNR site.
CONCLUSION
The existing asphalt and aggregate operations have served the City
well for many years by providing necessary products at a lower cost
than from other sources. With the pending closure of the Cambie
Yard, and with the value to the City that the aggregate handling and
asphalt plant provide, it is now appropriate to redevelop the
facilities at a site on the Fraser River.
The estimated total savings in operating and capital budgets with the
new asphalt plant and asphalt recycling operation, will be over $1.0
million annually ($675,000 currently), when compared to
outside purchase of asphalt. The estimated savings in the aggregate
and aggregate recycling operation will increase from the current
estimate of $750,000 annually, to over $1.5 million annually.
The recommendations contained in this report will allow design and
estimates to proceed, with a report back in Spring 1996. The target
date for completion and start up is summer 1997.
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