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HomeMy WebLinkAboutCSD-18-086 - Doon Pioneer Park Community Centre Expansion UpdateREPORT TO: Community and Infrastructure Services Committee DATE OF MEETING: June 18, 2018 SUBMITTED BY: Mark Hildebrand, Director Neighbourhood Programs and Services, 519-741-2200, X7686 PREPARED BY: Mark Hildebrand, Director Neighbourhood Programs and Services, 519-741-2200, X7686 WARD (S) INVOLVED: Ward Four DATE OF REPORT: May 24, 2018 REPORT NO.: CSD-18-086 SUBJECT: Doon Pioneer Park Community Centre Expansion Update ___________________________________________________________________________ RECOMMENDATION: That $550,000 be added to the Doon Pioneer Park expansion budget to address the project over- expenditure, and That funding for the over-expenditure be considered and referred to the 2019 Development Charges Background Study and the 2019 Capital Budget & Forecast. BACKGROUND: In February 2017, Council approved the Doon Pioneer Park Expansion Business case, including $3.97million in the 2017 capital budget for the expansion. Of the $3.97 million, $2.9 million was specifically allocated for construction, while the remainder was allocated for contingencies, soft costs (e.g. consultant fees, percent for art) and HST. In May 2017, City Council awarded a tender to +VG Architects to work with the project team, to design and develop drawings for the renovation and expansion. The expansion was scheduled to be completed over 2018 and 2019. The project team (including City of Kitchener staff and representatives from the Kitchener Public Library (KPL) and neighbourhood association) worked with +VG architects on drawings that would meet the needs outlined in the business case. The drawings (see appendix A) forwarded by the architects includes an expansion of approximately 9,000 square feet and renovations of existing spaces that would increase and enhance amenities available at the centre. The current concept includes a new gymnasium, two multi-purpose program rooms, a central foyer area, office space, and a new splash pad. REPORT: th Tenders for the Doon Pioneer Park renovation and expansion project closed on March 7 with the goal to commence construction in April 2018. Unfortunately,all of the bids submitted were significantly over- budget, the lowest was approximately $1.14 million over-budget. Post tender analysis and review To understand the significant budget variance, staff asked the architects to engage a professional third party cost consultant to analyze the proposed expansion and renovation developed by the architect, *** This information is available in accessible formats upon request. *** Please call 519-741-2345 or TTY 1-866-969-9994 for assistance. 8 - 1 and the estimated costs compared to those included in the bids received. It was the opinion of +VG architects that cost per square foot would be approximately $301, considering the scope of the project. However, the lowest bid came in at approximately $384 /square foot, a 27.5% variance to the Specifically, staff requested the architects to have the third party provide the following: 1. An opinion on the quality and completeness of the tender documents issued by the City, 2. An opinion on the associated cost estimates and whether they fairly represented the contents of the tender documents, 3. An opinion on the construction costs that could be anticipated in March of 2018, and 4. An opinion on the actual tender results, including the possible contributing factors for the higher than anticipated results. That third party cost consultant undertook a review of the documentation provided for the Doon Pioneer Park Expansion and forwarded the following opinion/findings: 1. The tender documents issued by the City appeared to be clear and complete. 2. The market conditions in the Kitchener-Waterloo region appear to be experiencing increased construction activity, which may have resulted in limited availability of trades and/or sub-trades (It should be noted that this poses particular problems for smaller projects like the Doon expansion and renovation). 3. The construction cost as prepared by +VG, may have been on the lower range for some of the elements of this project. Although construction of a stand-alone facility could be anticipated at approximately $300 /square foot, a premium of approximately 10% is expected on the total construction cost of the Doon expansion and renovation because: The construction program is integrating with an existing facility, and There is a loss of economies of scale given small size of the project. The costs estimated for demolition and site work were also believed to be low. 4. In their opinion, having only 3 bidders submit a bid does not constitute a fully competitive process. 5. Had the project been open to a larger pool of contractors with restrictions on the use of non- union trades minimized or eliminated (which is not possible for the City of Kitchener), bid results might have been closer to the budget. 6. The bid form was complex for a project of this size and scope (a small expansion and renovation) in a heated market. Although it was the consultants opinion the bid forms were too complex for a project of this size, staff believe the forms prove to be very helpful when changes (e.g. changes to project scope) occur during the project, to ensure we are working with appropriate pricing. In summary, there may have been a number of factors acting together which contributed to the variance in the pre and post tender cost of this project. 8 - 2 Concerned with the cost per square foot of the tenders (e.g. the lowest bid coming in at $384 / square foot), staff were interested in understanding, historically, what the cost / square foot has been for past community centre projects. Table one outlines past community centre projects and their associated costs. Also provided for each project are inflationary costs, where initial cost /square foot for each project has been escalated 5% per year to get an understanding of what their cost would be in 2018 dollars. Table 1. Cost / Square Foot of past Community Centre Renovations/Additions Inflationary Construction Renovation/Addition Construction Cost/Square Cost Community Centre Area Square (Year)Value ($)Foot($)Square Foot Foot($) Doon Pioneer Park 9,000 + Expansion and Expansion and Renovation$4,043,476renovated $384.00$384.00 Renovation (2018)space Stanley Park Community CentreNew Build3,739,90519,181$ 194.98 $367.66 (2005) Victoria Hills Community CentreExpansion1,604,05713,679$ 117.26 $210.58 (2006) Large Renovation and Bridgeport Community addition (entire interior 1,225,2625,872$ 208.66 $ 339.88 Centre(2008)building renovation, rink boards and site works) Kingsdale Community Reconstruction (Demolition 3,332,81816,533$ 201.59 $283.65 Centre(2011)renovation adaptive reuse) To understand possible approaches to address the over-expenditure experienced with this project, staff reviewed a number of past projects that also experienced over-expenditures. As shown in table two, strategies for addressing over-expenditures falls into 3 categories including: 1. reducing the scope of the project, 2. delaying the project, or delaying a portion the project scope, and/or 3. funding the over-expenditure from other capital and/or reserve accounts. Table 2. Past Project Over-expenditures ProjectInitial Amount Resolution BudgetOver Over-expenditurefunded from the following sources: Victoria Park 1.FM Capital -$65,000 $400,000$150,000 Washrooms2.Parks Improvement fund -$25,000 3.Capital Contingency -$60,000 Over-expenditurefunded from the following sources: Kingsdale 1.FM Capital $86,000 $3.69 million$458,000 Community Centre2.CP&S GP -$200,000 3.Capital Contingency -$172,000 Bridgeport Scope reduced as a result of constraints associated with $2.25 million$1.08 million Community Centrebuilding on a floodplain. Charles/Benton This project was delayedby 5 yearswhen the first round of $16 million$450,000 Parking Garagetendering came in high in 2002. During the second 8 - 3 ProjectInitial Amount Resolution BudgetOver tendering, over-expenditurewas associated with a staircase to be considered forthe Charles Street frontage. It could not be accommodatedin the project budget so it was removed. Over-expenditureaddressed by: Kitchener i.reducing and delaying scope of the project Operations Facility ii. $46 million$2.2 million current iii.funding from asset management reserve fund generated through additional land sales As shown in table two, over-expenditures of past projects were often addressed using a combination of strategies which included reducing project scope, delaying the project or part of the project, and/or funding the over-expenditure from other capital or reserve accounts. Staff have utilized these historic approaches to formulate the recommendation for this project. Recommendation for the Doon Expansion Project Staff have been in compliant bidder Gateman-Milloy Inc., to reduce the cost of the alterations to the project without jeopardizing building functionality, the splash pad, or significantly decreasing the expansion square footage. After reviewing all the elements of the project as part of the discussions, a reduction of approximately $510,000 can be found. In addition, the Doon Pioneer Park Community Association will be contributing $80,000 to the project. In addition to these amounts however, it will still be necessary to add an additional $550,000 to the construction budget. In order to fund this additional amount ($550,000), staff are recommending to pre-commit future development charges in 2019 and staff have contacted the consultant that prepared the 2014 DC study (Hanscomb), to are used to fund growth-related community centres). Hanscomb million of additional funding willlikely be available for indoor recreation as part of the 2019 DC study. If this recommendation were pursued, Supply Services would bring forward a recommendation (report FIN-18-014)to award the tender at the negotiated reduced tendered price to the June 25, 2018 Council meeting. If therecommendationto add to the budget and continue with the current projectwerenot pursued, staff wouldremain dedicated to seeing an expansion and renovation to completion. However, it would require thecancellation of the current tender, and a revised (reduced) scope of work be re-tendered to meet the $2.9 million construction budget, or a revisedbudgetamount as directed by councilat a later date. Re-tendering would not occurbeforeNovember -December 2018 and this would delay the project by at least a year, with estimated construction beginning spring 2019. It is expected that with a smaller renovation, pressure to find programming space would continue with the existing facility in this community. TheDoon Pioneer Park business case projecteda population increase between 8,366 and 11,086 people and a household increase between 3,512 and 4,000 units by the year 2036. This trend indicates that demand for community services will continue to risein this community. ALIGNMENT WITH CITY OF KITCHENER STRATEGIC PLAN: Strategic Priority:Safe and Thriving Neighbourhoods 8 - 4 Strategy: NB42 Doon Pioneer Park Community Centre Expansion Strategic Action: Upon completion of the Business Case, design and construct an addition to the Doon Pioneer Park Community Centre. FINANCIAL IMPLICATIONS: Staff are suggesting to add $550,000 to the Doon Pioneer Park expansion budget in order to help address the project over-expenditure. COMMUNITY ENGAGEMENT: INFORM / committee meeting. ACKNOWLEDGED BY: Michael May, DCAO, Community Services 8 - 5 Appendix A 8 - 6