HomeMy WebLinkAboutCAO-06-014 - KPL /Centre Block Costing Review1
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REPORT
Report To: Councillor Berry Vrbanovic, Chair and Members of Finance
and Corporate Services Committee
Date of Meeting: February 20, 2006
Submitted By: KPL/Centre Block Project Committee
Prepared By: Carla Ladd, CAO
Ward(s) Involved: Ward 1
Date of Report: February 17, 2006
Report No.: CAO-06-014
Subject: KPL/Centre Block Costing Review
RECOMMENDATION:
That should Council wish to continue with the Request for Expression of Interest/Proposal
process for the development of a new Central Library on the Centre Block, a review of project
costing in relation to the new library and underground parking be completed prior to final
approval of the Terms of Reference document for the Centre Block project.
BACKGROUND:
On February 6, 2006 Finance and Corporate Services Committee considered several
recommendations pertaining to the Request for Proposal process for the development of the
City's Centre Block. These recommendations set out a number of financial contributions from
the City as a means to achieve the construction of a new Central Library together with public
underground parking. On February 13, City Council deferred action on the recommendations
pending a review of recent public input as well as consideration of the value of reviewing the
costs of the project.
REPORT:
The KPL/Centre Block Project Committee met on February 16, 2006 to discuss a possible
approach to the review of project costs. In considering Council's request, the Committee felt
there could be two stages of project review.
The first stage could be to review the current costs which have been assessed in relation to the
library and the underground parking to ensure that these costs are valid and as accurate as they
can be given there is no specific design for the library, only a functional design with a clear set
of specifications. This review would seek to ensure that the financial package being developed
to achieve the construction of a library support the costs.
The second stage of review would be at the time of project selection and awarding. This review
would be a full project audit to ensure that the proposal for development and its related costs
are accurate and the project financing is solid. Some provision for review is set out in the
Public-Private Partnership Procurement Policy (P3) document approved by Council, however it
is not clearly stated that a full project audit will be required. It is therefore recommended that
the P3 Procurement document be amended to include requirement for an audit of the selected
project.
In discussing the merits of a review of the current costing in relation to the library and the
parking, the Committee noted that much work had already been completed in this regard and
felt that this information should be compiled and communicated to Council.
Costing estimates for a new library on Centre Block were first developed for the Business Case
in September 2004 based on information from three reports:
• Kitchener Public Library: Functional Building Program prepared by Beckman Associates
Library Consultants dated November 2003
• Kitchener Public Library: Queen Street Redevelopment Study prepared by Walter Fedy
Partnership dated March 22.2004
• Centre Block Redevelopment by Royal LePage dated March 22, 2004
Subsequently, in the fall of 2005, the firms of Levitt Goodman Architects and Phillip Carter
Architect were retained to complete a functional design for a new library on Centre Block. This
team of architects worked with Hanscomb Limited, a specialized cost consultant, to produce an
order of magnitude cost estimate for the new library. Because of the extent of the work being
undertaken and based on further detailed information not available in 2004, this new cost
estimate was much more detailed than the preliminary estimates contained in the original
business case.
Order of magnitude costing is typically prepared for a conceptual project such as this one, that
is - a project that does not have a detailed design associated with it. It is an approximate
estimate made during the formative stages of a project for the purposes of initial evaluation and
is based primarily on the size of the structure and its proposed use and is usually reflected as a
cost per square foot. The accuracy of these estimates is in the range of plus or minus 10%. At
the design and preconstruction phase of a project typically cost estimates are further refined
and reflect a higher degree of accuracy.
The Project Committee believes there is some value in conducting a costing review. Although
there is a relatively high degree of confidence in the costing for the proposed structure, the
committee felt there may be some benefit to a review of the costing for furniture, technology and
library growth collection. However to review only some costs in absence of others would be
difficult and as such, review of all the costing is recommended.
Should Council wish to proceed with a review of the costing for a new library and underground
parking, there are two approaches that can be considered:
• A peer review of the Hanscomb costing which has an estimated costs of $8,000 plus
disbursements;
• An independent review of project costs using the available functional design, program
information and assumptions which would have an estimated cost of $14,000 plus
disbursements and approximately $2,000 in fees and expenses for the participation of
the architect project team.
FINANCIAL IMPLICATIONS:
Fees to conduct a review of project costing would range from $8,000 to $16,000 plus
disbursements.
CONCLUSION:
In order to ensure project viability, prior to the completion of the Terms of Reference for the
development of the Centre Block with a new central library and underground parking, a review
of the costs should be undertaken. However such a review should only be undertaken at such
time as a decision is made to proceed with the project.
Carla Ladd, CAO
Hans Gross, Director of Project
Administration and Economic Investment