SUPPORTS ITEM NO. 2
CS&B COMMITTEE AGENDA
JANUARY 11, 1996
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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